What Amazon’s HQ2 will mean for house prices in Ashburn? (Richmond: hotel, new construction)

[brooklynborndad]

Originally Posted by the resident09

That's the conservative outlook, which is just fine. However, that's not including the 1.5-2.5 indirect jobs that will be spurned by HQ2, and it definitely doesn't count the potential additional 12,500 jobs in a phase 2 if all goes well. 25k jobs could easily reach 60k-75k jobs if all goes well. Regardless the area around HQ2 was already slated for some growth, but this will definitely solidify it much more. I think it will trickle out some towards the direction of the Silver line and Ashburn, but it won't be anything devastating no.

What was Microsoft looking like it would grow to 25 years ago? Yahoo? IBM? Compaq?

[Piney Creek]

Originally Posted by NOVA_guy

Stephen Fuller, an economist, crunched the numbers of how he thinks each locality will be impacted by new HQ2 households, pretty interesting -

Montgomery County, MD - 7.6%
Prince George’s County, MD - 4.6%
Washington, DC - 13.2%
Arlington County - 16.4%
Alexandria - 5.1%
Fairfax County - 33.0%
Loudoun County - 5.5%
Prince William County - 6.3%
Stafford and Fredericksburg - 0.8%

Hope you don't mind that I'm borrowing this for the HQ2 thread on the General US Forum.

[tgbwc]

Originally Posted by NOVA_guy

Stephen Fuller, an economist, crunched the numbers of how he thinks each locality will be impacted by new HQ2 households, pretty interesting -

Montgomery County, MD - 7.6%
Prince George’s County, MD - 4.6%
Washington, DC - 13.2%
Arlington County - 16.4%
Alexandria - 5.1%
Fairfax County - 33.0%
Loudoun County - 5.5%
Prince William County - 6.3%
Stafford and Fredericksburg - 0.8%

I hope it’s not that big of an increase.

[Piney Creek]

Originally Posted by tgbwc

I hope it’s not that big of an increase.

LOL I hear ya. Fairfax is a fairly big county, and it'll be spread out, but still I was kind of glad to see Fairfax get the 33% (and not my county, LOL). 5.5% is just fine for Loudoun.

[EmiSky]

Originally Posted by NOVA_guy

Stephen Fuller, an economist, crunched the numbers of how he thinks each locality will be impacted by new HQ2 households, pretty interesting -

Montgomery County, MD - 7.6%
Prince George’s County, MD - 4.6%
Washington, DC - 13.2%
Arlington County - 16.4%
Alexandria - 5.1%
Fairfax County - 33.0%
Loudoun County - 5.5%
Prince William County - 6.3%
Stafford and Fredericksburg - 0.8%

I'm sorry but what do these numbers represent?

[22003yo]

Originally Posted by EmiSky

I'm sorry but what do these numbers represent?

It means pretty much nothing, just one persons guess. Take a look at wall st analysts and you can see the accuracy of these economists are quite poor. No one knows what will happen, many other factors at play such as rising rates. There was also no time frame given behind the numbers, there is no way Fairfax County prices are going up that much in just 1 year, I can tell you that much. Maybe over 5 years? Only time will tell.

[Abraham Walker]

Originally Posted by brooklynborndad

A. It puts a big dent in the commercial vacancy in Crystal City. It cuts it in half, and basically returns it to a more or less normal vacancy rate. That is BEFORE suppliers, etc, come in.

The initial report showed that Amazon would be leasing 500k sq/ft of commercial space when 4+ million sq/ft is currently available in Crystal City alone. Building what they need versus renting what's available isn't a positive sign for existing landlords. How does removing 1/8th of the available inventory represent a "big dent" in the commerical vacancy rates?

Originally Posted by brooklynborndad

B. It adds an important tech academic institution to the northeast part of City of Alexandria, which MAY, over time, draw other tech employers unrelated to Amazon.

Good point. It's not concrete and I understand the local governments attempting to solve the problem of retaining young professionals in the area.

Originally Posted by brooklynborndad

C. It accelerates/confirms some key transit improvements - if you have been following local politics in the City lately, you will know that the removal of the southwest entrance from the new metro station was a big controversy - now the entrance is back.

I think this was the purpose of the "hype". Local governments knew that citizens would not support transit improvements. But, add in the hope of securing the largest retailer in the world, people will look the other way.

The Amazon deal was a great move for the area to diversify itself from the government sector. Being at the mercy at whatever president takes office is not a great way to run a region.

It just seems like there's a level of dishonesty in the way the project is being sold to citizens. Politicians are talking as if there's a guarantee that Amazon will attract other businesses to the area. Politicians are talking is as if there's a guarantee that home prices will increase which leads to an increase in revenue for the local government.

Amazon's deal reminds me of the deals cities strike with professional sports teams. They sound great on paper and suck in real life.

But, at least you can say, "during my administration, I secured __________."

Originally Posted by brooklynborndad

I agree though that there are several factors mitigating against the panic about increases in housing prices.

It's too early to say if Amazon's presence will be enough to shift the market in the coming years. 2,500 jobs with their expected average salary every year for 10 - 20 years is a serious matter.

Consider this, Exxon Mobile relocated it's headquartered a few years ago. At the time, it received a lot of local press. The region lost 2,100 jobs.

Amazon HQ2 is like receiving an Exxon Mobile headquarters every year for the next 20 years.

That's a big deal.

Originally Posted by skeddy

it will have zippo effect, skyrocketing home prices are real estate market hype.

Real estate agents only talk about one thing. It's a great time to buy and sell. Regardless of the market conditions.

People should buy or sell a home when they need a home and it fits their long-term goals.

Originally Posted by NC211

I’m guessing you skipped the first week of economics 101.. it’s called supply/demand.

Let’s not all forget here that it’s not just Amazon, but the inevitable support businesses that will follow and feed from Amazon too. Amazon is the catalyst event only here.. a big one, yes, but a trigger event, not the main event once this is all done and said for.

Is it safe to say that this move is a trigger event?

Economics teaches us that market movement is the byproduct of many factors including supply/demand. Based on the current housing market, there isn't enough supply for current residents that live in the area.

Why is Amazon's presence good for a market with less than 6 months of inventory? (6 month's of inventory is considered a balanced market. We've been in a seller's market for more than half a decade.)

Originally Posted by NC211

Let’s also not forget that Apple is still buzzing a few control towers as well, looking for a new runway to call an annexed home. We have the talent pool here for both. The DMV is right up there with San Jose and the best of Sillycon Valley when it comes to tech talent.

Northern Virginia does not have the talent pool for both companies at this present time. They have the potential to recruit the talent to the area because of the amenities offered by living in the area. Our unemployment rate is too low to support any one of these companies moving to the area.

And, that will not stop people from moving to the area pursuing the opportunities that these companies provide.

While I look forward to seeing the area turn into a technology hub, I don't think the current residents understand what this means for them. California is a great example of what happens when areas have more opportunities than they can service. You have markets where home prices increase by double-digit percentages.

That may sound good and consider the challenges it presents to the current labor force that do not qualify for the new opportunities. They will slowly get priced out of the market.

The home buyer that can afford $400,000 has different opportunities than the home buyer with a $600,000 or $800,000 budget.

Originally Posted by Piney Creek

I'm not exactly sure what you mean by "hype fest" but if what you're saying is Nova got an incredible amount of promotion out of all this, yeah. I agree. And I'm all for it!

I don't mind the attention. I think it helps the region recruit more businesses to the area. What I don't like is the way consumers respond to this new information?

In my NextDoor community, people are already speculating that their homes have increased by $50,000 - $70,000 in value from this news.

Says, who?

This information will lead some people to place unrealistic expectations on themselves and the market. Sorta like an artificial bubble because the seller's in Spring 2019 season will increase their prices pass the 3.5% increase we've seen over the past 9 years because of the Amazon bump.

Originally Posted by Piney Creek

I like seeing our corner of the world being presented as desirable, especially to millennials and techies. Not that it wasn't before, but getting hype like this is like getting an extra dollop of whipped cream on your pudding. If the "Amazon effect" turns out to be mostly hype, that's ok too. Even if only 50% of the hype actually happens, the effect of having it here is positive.

Underneath the hype is all good things for the region. Transportation improvements will be better for everyone. The Route 1 development can speed up its development and help some of the homeowners in that forgotten region of Fairfax County move into better housing.

National Harbor has been having some challenges moving some of it's newer inventory which causes problems for existing homeowners to sell their properties. This news could lead to that area selling more units.

These are two examples I see that will be positively affected by this news.

How people deal with the hype is the challenge? As long as homeowners do not look at their properties as ATM's, we should be fine.

Originally Posted by brooklynborndad

What was Microsoft looking like it would grow to 25 years ago? Yahoo? IBM? Compaq?

Are these companies the best models to represent this opportunity for the region since most of those companies and located in their startup markets? Meaning that they IPO'd in their local area which brings millionaires to the region versus thousandaires.

Originally Posted by 22003yo

It means pretty much nothing, just one persons guess. Take a look at wall st analysts and you can see the accuracy of these economists are quite poor.

These guys and girls don't get paid for being right. They get paid for saying stuff on a regular basis.

[Hal Roach]

A broken clock gives the correct time twice per day.

[paytonc]

Originally Posted by EmiSky

I'm sorry but what do these numbers represent?

The percentage of Amazon employee households who are likely to live in each jurisdiction. It's based largely on where similarly paid Arlington based employees live today, so there's a chance Amazonians will be different -- based on their Seattle workforce, it might have a larger impact closer in.

NOT saying Fairfax population or prices will increase 33%!!!

[mountainrose]

I don’t have time to read this whole thread — does anyone know with all the money we gave Amazon to dock here, will VA
Still make out with some state tax profit from them being here?
Thanks