Will Amazon HQ2 plans move Seattle’s housing crisis to the East Coast?
With the news of Amazon HQ2 spreading across two East Coast cities, residents of both communities could soon experience a change in their housing markets similar to what Seattle has seen over the past decade.
Amazon is placing one HQ in Long Island City (in the borough of Queens in New York City) and another in Crystal City, Virginia (in Arlington County). Amazon’s neighborhood in Crystal City will be named “National Landing.” Amazon HQ2 is therefor split into two.
GeekWire has a correspondent in Arlington County monitoring local reactions. The housing market will be one aspect to watch as Amazon employees and executives start exercising the option to move to New York or Virginia, Bishop recently told KIRO Radio.
“A little bit of sarcasm … one person said they look forward to the coming gentrification,” Bishop said.
Redfin Chief Economist Daryl Fairweather reported that the online real estate company saw an 800 percent increase in viewing of homes in Long Island City, and 200 percent in National Landing following news of the HQ2 split.
“The first effect we will see is an increase in inventory, more homes on the market and more options for buyers,” Fairweather said.
“The price point in Crystal City Virginia is very similar to the price point in Seattle,” she said. “In Long Island City, it’s actually a bit more expensive to own than it is in Seattle.”
Fairweather speculates that the move won’t necessarily draw Amazonians hoping to get more bang for their buck, but it will attract those originally recruited from the East Coast.
Seattle has been patient zero for Amazon’s effect on housing
For anyone wondering what the future of housing prices looks like post-Amazon, look no further than Seattle.
According to Builder, rental prices before 2010 in Seattle were actually level with the national average. But once Amazon established its presence over the next seven years, median rental rates skyrocketed over 41 percent, while rental prices nationwide went up just 17.6 percent.
Prices for buyers saw an even more dramatic uptick, increasing over 83 percent between 2010 and 2017, almost double the national rate.
So, what does that mean for Long Island City and Crystal City?
According to Rentcafe, LIC added over 12,500 units in 41 apartment buildings between 2010 and 2016, with an additional 15,400 units under construction now.
Crystal City on the other hand may find it tougher, with just 3,100 units under construction and no major development projects over the last two years. That said, Rentcafe pointed out that a strong public transit system would make it possible to use over 205,000 available rental units in the surrounding metropolitan area.
Rental rates in both cities are already high, and an increase from the influx and hiring of 25,000 new Amazon employees in each city could very well send prices through the roof.
Average rent right now in Crystal City is $2,387 per month, while LIC is $3,458 per month. Comparatively, Seattle’s average monthly rental rate as of October 2018 is $2,048.