Arlington, Virginia, will be the home of Amazon HQ2
We are halfway through the year, and there has been a lot affecting the Northern Virginia real estate market, including stock market fluctuations, the government shutdown in January 2019, and the announcement Amazon HQ2 is coming to Crystal City in Arlington, Virginia. Mortgage interest rates are also down, and Virginia Tech announced a new one-million-square-foot Innovation Campus will be built in Alexandria, Virginia.
Amazon will bring over 25,000 jobs to the region by the 2030s, and there could potentially be one more non-Amazon job for every Amazon job. Real estate prices have already increased across Northern Virginia, including in Alexandria, Arlington, Fairfax, Springfield, and Falls Church.
Amazon also announced a partnership with Realogy to offer homebuyers in fifteen cities opportunities to purchase high-value homes online. Realogy has a long-term relationship as a holding company for Coldwell Banker, Century 21, Sotheby’s International Realty, and others. According to Forbes, they are offering buyers Amazon product perks for closing online, which could affect the entire real estate business.
The Current Northern Virginia Real Estate Market
Almost immediately, the listing prices for homes in Arlington rose 17 percent with the announcement of Amazon HQ2, and it isn’t even here yet. Many existing workers have already been priced out of the NOVA real estate market, adding to the issue of losing seventeen thousand affordable housing units since 2000.
Curbed reports as follows:
Ingris Moran, a lead organizer with Tenants and Workers United, which advocates for renters, workers, and communities of color, says Arlandria has been on edge since the HQ2 announcement. Roughly 90 percent of community members are tenants, she says, and pay much less than surrounding areas; as the Washington Post reported, the median monthly rent for a two-bedroom apartment is $1,856, compared to $3,142 in Old Town and $2,733 in Pentagon City. “We’re already hearing that when residents went to renew their leases, they’re seeing tons of rent increases due to Amazon arriving,” says Moran. “We’re hearing rents going up $100 a month, a lot for working families. And this is with just a few hundred Amazon employees.”
A comparison between June 2018 and June 2019 reveals a hold on the market. Prices are up, but sales have dropped. Northern Virginia’s Association of Realtors (NVAR) cites almost a 20 percent decrease in home sales across Arlington, Alexandria, Falls Church, and all of Fairfax County, except for Fairfax City, which is actually up 17.65 percent. The NOVA real estate market is currently a seller’s market because inventory and listings are also down. Some are waiting out the market shifts to profit from the expected changes. (You can watch some tips on how to navigate buying a home in this current market here.) NVAR statistics say “the average home sale price rose by 5 percent compared with last June, to $632,016. The June 2018 average price was $601,928.The median sold price of homes this June, which was $565,155, rose by 3.13 percent compared to the median price of $548,000 in June 2018.” You can view the complete report here.
Northern Virginia Real Estate Predictions
Luxury Homes in Northern Virginia
What do experts predict for the Northern Virginia real estate market for the rest of 2019 and beyond? Some believe Amazon coming to Arlington is simply bringing to light an inflated housing cost problem that already existed in Northern Virginia—a problem that also exists in other major cities in the United States, including San Francisco, California, and New York City, New York.
The NVAR/GMU Market Forecast predicts a 17.2 percent increase in Arlington County median home prices, a 7 percent increase in Fairfax prices, and a 6.2 percent increase in Alexandria prices by the end of 2019. Inventory is projected to continue to decrease, but the seller’s market could flip in 2020 as price increases stabilize.
What Real Estate Move Should You Make Now?
Buy a Home in Northern Virginia
Now is the time to invest in commercial real estate in Northern Virginia. You want to do so before rezoning, before a buyer’s market frenzy, and before Amazon HQ2 fully arrives. After those things happen, you might miss your opportunity.
If you’re already in the residential market and want to sell your home, you could make more now because inventory is low. Remember, housing values will eventually plateau and could even decrease before stabilizing. Low mortgage rates might incentivize buyers, even if listing prices are at a peak. Buyers might also pay premium prices (even above market value) to own homes they love in desirable neighborhoods.
If you are looking to buy a new home, low mortgage rates offer the opportunity to get a place you will truly love. Even if its listing price is a little higher than it was last year, the home will continue to retain that value, if not increase in value in the coming years.
Ray Gernhart & Associates have navigated the Washington, DC, metropolitan area for over thirty-five years. Ray knows how to work within the market, protecting buyers and sellers alike. See more of what Ray has to say in this brief video, and then give him a call. No one knows this Northern Virginia commercial and residential real estate market better.
