Investment, Money Matters

The Ripple Effect of Amazon's HQ2 on Arlington and Queens

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What started with cities in over 200 North American cities to gain the attention of Amazon and become called home to the online retailer’s HQ2 is now narrowed down. On November 13, 2018, Amazon made a somewhat surprising announcement. Instead of one campus, the e-commerce giant has decided to call two cities the home of HQ2: National Landing, Arlington, Virginia and Long Island City, Queens, New York. It looks like we won’t need to wait long to see the ripple effect of this decision will have on those local real estate markets.

What is HQ2?

HQ2 will be Amazon’s second corporate office. The campus will enhance the company’s Seattle, Washington headquarters. Many experts agree that the sites selected are not very surprising, since having a foothold in the eastern United States is one worth having for Amazon.

What’s Amazon Bringing to the Table?

You may be wondering about all the excitement and questioning how one company can have such a massive impact on the real estate market. Well, this isn’t just any company. This is Amazon.

They have promised a total of 50,000 new, well-paying jobs. The plan at this time is to split that evenly with about 25,000 workers at each of the new campuses. These will be workers who are well-qualified for their mortgages and ready to grow some deeper roots near their lucrative jobs.

The Ripple Effect

In addition to the obvious direct-hire jobs, Amazon anticipates spending $5 billion to build out these campuses. Once these projects break ground, there will be no shortage of work for contractors and tradesman for the next several years. These workers will need housing during the term of the project, and apartment rentals are expected to rise.

Once the HQ2 campuses are completed and ready to operate, their employees will pump billions of dollars into the communities each year. Not only will Amazon itself be hiring, businesses around the campus—coffee shops, grocery chains, and hotels—will begin to flourish.

One thing’s certain. There will be money to make. It will be fun to watch these communities undergo the revitalization.

Let’s take a closer look at each of the chosen cities.

National Landing, Arlington, Virginia

Crystal City, a neighborhood of Arlington, Virginia is best known as the gateway to Reagan National Airport. The proximity of the airport supports several hotels, restaurants, and shopping destinations. But beyond that, this Arlington neighborhood stands almost frozen in time. It takes you back thirty or so years to the 1980s when it was a thriving and vibrant community.

For many years, homes in this part of Arlington have been considered some of the less desirable in Arlington County. They lack the character of the historic homes in the city or the close proximity to Washington than those neighborhoods to the north of them. The noise of the freeways into DC and the constant roar of jets make it noisier and less appealing. Quite frankly, Arlington homeowners have opted for more sophisticated neighborhoods.

Families here have a nice income. In fact, the Arlington median income is $108,706 and housing prices average $623,000.

With the coming of Amazon, Crystal City is soon to be rebranded as National Landing. New name, new image, new site of HQ2. In fact, the sprawling campus will encompass much of Crystal City, and parts of nearby Pentagon City and Potomac Yard.

Already properties that have been on the market for several months with no offers are beginning to be seen as “prime” real estate—pardon the pun.

And the sound of the airplanes overhead? I suspect that the direct access to Reagan National Airport is a big reason why the Crystal City site has been selected for the transformation into National Landing.

Long Island City, Queens, New York

Although it’s just across the East River from the shimmering lights of mid-town Manhattan, the Long Island City neighborhood of Queens, New York could just as easily be miles away. It’s a mostly industrial community packed with warehouses and factories mixed with multi-family residential units and tall office buildings.

Of course, there are great local pubs and restaurants. But the area lacks the dazzle of Manhattan of the trendy and quirky appeal of Brooklyn to its south.

Despite the more industrial feeling of the community, Long Island City has a median income of $56,201 with an average property value of $618,300. This makes for tight budgets when shopping for homes and workers in the community seeking housing in more desirable neighborhoods in the surrounding areas.

At least, it was until Amazon. Now, properties that languished on the market are garnering interest from real estate investors who want to acquire property adjacent to the proposed HQ2 site.  This is creating demand that is already driving up property prices in the few weeks since Amazon’s announcement.

There Is, However, A Flip Side

There is, however, a flip side. It appears that buyers and sellers in these two markets are coming to an impasse rapidly. You see, buyers want to snap up property in the areas surrounding the HQ2 campus sites. Sellers, on the other hand, are not quite as motivated to sell today as they were just a few weeks ago. They realize that if they can hang on to their properties for another couple or so of years, the demand will reach a fever pitch. If they hold out, they will reap even greater rewards.

So, it’s looking like while there will still be sellers, they will be just a touch less motivated than they were before.

Opportunity Lies Ahead

If you own properties in Queens or Arlington, the ripple effect will reach for miles around the Amazon HQ2 sites. You have the chance to reap enormous profits. However, if you are seeking properties, the time to start the search is right now. This ripple effect will only drive up market values for the foreseeable future.

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real estate, Amazon, Amazon headquarters, real estate trends, Arlington, Queens, New York