Ever since Amazon announced plans to build a second Amazon Headquarters somewhere in North America, the internet has swarmed with speculation and cities with competition.
Any city in North America could submit themselves as an option as long as they were a metro area with at least one million people and an international airport with nonstop flights to Seattle.
With plans to invest over five billion dollars in construction and create up to 50,000 jobs, more than 200 cities applied to be the location of HQ2. Since then, the list of contenders has been reduced to just 20 cities.
While the continent waits with bated breath for Amazon to pick their winner, other conversations are emerging - like how HQ2 will affect housing in its chosen city.
Big companies move into new cities all the time, and a familiar pattern has emerged. There is an increase in job creation and in wages as well as a rise in home values and home prices. In Seattle, home to Amazon’s original headquarters, home prices have increased by 83% and rent prices by 47% as a result of the company’s presence. Renters and wannabe homeowners have drawn the short straw in this scenario. Renters will have an increasingly difficult time finding and keeping affordable housing and can either explore the option of a longer lease or consider homeownership. Even if you haven’t saved enough for a downpayment, you can look into down payment assistance grants and forgivable loans.
If first time home buyers wait too long to purchase in the chosen city they’ll be faced with increased property prices and will have to borrow even more money or may even be forced out of the city.
Homeowners, however, should rejoice. They’ll see growth in home equity and their home appreciation will rise.
Periodically property taxes are adjusted and these will likely increase after Amazon’s HQ2, but this alone likely isn’t enough to force homeowners out.
But all of this depends on which metro area Amazon picks and how much room the area has for expansion.
How the chosen city’s housing market reacts will all depend on how flexible it is, taking into account the existing inventory available, recent home price performance, demand, and the available space for new construction. Areas with more existing inventory and space will be able to more easily accommodate HQ2 and the need for new home construction.
Of course, it doesn’t just matter what city Amazon picks but where in that city they choose to build. For example, if Amazon decides to move to the outskirts of their chosen city, where more land is available, homes nearby may not be cheap but this won’t affect already limited housing in the city’s downtown area nearly as much as it would if they built further inside the city.