A year ago, Amazon AMZN, -0.93% announced its plans to build a pair of new headquarters as part of its so-called “HQ2” project: One in New York City, and another in Virginia. But months after this announcement, Amazon decided not to move forward with its headquarters in the Big Apple, leaving the region surrounding Arlington, Va., as the sole home to HQ2.
In Virginia, home prices remain seriously elevated, while in New York prices have fallen since Amazon backed out of its plans for a large campus there. Initially, home prices in Northern Virginia rose 21% following Amazon’s announcement. A year later, the median listing price in Arlington County is $863,000 as of October 2019, up 33% year-over-year, according to Realtor.com. The median sales price in Manhattan, meanwhile, has dropped 15% in that same time to $1.04 million.
Researchers pointed to Amazon’s original home of Seattle as a cautionary tale: Home prices there had risen nearly 73% over the last five years when the tech company announced its HQ2 plans, a reflection of the increased demand for housing that Amazon and other tech cities had caused thanks to the growing workforce they nurtured.
Those concerns have come to fruition in Northern Virginia, according to a new analysis from Realtor.com. In both New York and Northern Virginia, the HQ2 announcement led to a significant uptick in home sales, as investors and prospective HQ2 employees scooped up property in anticipation of Amazon’s arrival.
Amazon hasn’t just caused prices to go up – it’s also led to a major shortage of housing across Northern Virginia as people looking to cash in on Amazon’s arrival have stocked up on properties they can own. Across the 14 counties in Northern Virginia, the number of homes actively for sale has fallen 26% over the past year.
In Arlington County, listing numbers are half of what they were before Amazon entered the picture. The number of homes that were up for sale in Arlington has dropped by half. Homes now sell in around 28 days, which is 10 days shorter than the period last recorded a year ago.
Amazon, meanwhile, has responded to the affordable crisis brewing in Northern Virginia by donating $3 million to a state homeless group.
via Market Watch