One year later: The Amazon effect on the D.C. metro housing market
Home price growth in certain markets surrounding Crystal City, Va., tripled the national average in the year since Amazon announced its second headquarters would go there.
Nationwide home price appreciation was 3.5% in September 2019, down from 5.3% the year prior. The metro cluster of Washington-Arlington-Alexandria went to 3.5% from 3.4% while the Silver Spring-Frederick-Rockville, Md., area edged up to 2.3% from 2.1%. The growth, although minimal, went against the national average and could be a harbinger of things to come.
"While we don't know precisely how the placement of a large corporate headquarters into a region affects a housing market, our work looking back on the first year of HQ2 suggests the potential for large upward swings in home prices near the chosen site," Ralph McLaughlin, deputy chief economist at CoreLogic, said in a press release. "What's more, the impact appears to take hold rather quickly, as investors and owner-occupiers bid up home prices in anticipation of future tangible demand."
Though by and large, the capital region didn't see a bubble-type pricing spike, specific areas within it did. Proximity to Crystal City — a mostly commercial neighborhood within Arlington, Va. — matters as eight of the top 10 ZIP codes by price gains sit within 10 miles of the HQ2 site.
Homes within the Chevy Chase, Md., 20815 ZIP code appreciated by 12.9 percentage points year-over-year. Four other ZIP codes, located in Virginia, saw double-digit grow from September 2018 to September 2019. Vienna's 22180 and Mt. Vernon's 22306 both grew by 11.4 percentage points. The Alexandria neighborhood in ZIP code 22302 had an 11 percentage point price rise, while Arlington's 22206 went up 10.4 percentage points.
Before Amazon's announcement in 2018, each of these ZIP codes had negative or near-flat price growth, according to CoreLogic's report. Accordingly, the area saw prime 'arrogance' effects of a major company bringing an infusion of prospective new people and boosting the value of the existing housing stock.