Amazon announced Monday night that they will officially split their headquarters between Northern Virginia and NY. The news is exciting for property owners and nerve-wracking for future buyers, but it will take a while for us to see the true impact on our area.
What does it mean for the Northern Virginia real estate market?
The shift to a normal / buyers market may be happening in other parts of the country but this area is not one of them (at least right now). When I look at a market to see if it’s leaning towards a buyer, seller, or balanced market I look to the absorption rate, a key metric in real estate. Absorption rate is one of the most accurate measuring sticks to assess the current market and help predict the future market (I’ll write another blog on this later). This metric looks at how long it would take to deplete the inventory at the rate that homes have gone under contract in the last 30 days, assuming no other homes comes on the market. Take a look at the charts at the bottom of the page, from the Northern Virginia Association of Realtors, to get an idea of historical absorption rates in our area.
Sellers & Buyers
Sellers will look to put a premium on how much they can sell their home for, especially the closer they are to Crystal City. There is a word of caution here. We saw this exact same thing happen when the Silver line was announced in the Tysons/Reston area. People who owned town-homes and single-family homes along the proposed Silver line did pretty well with property appreciation and resale. Condo owners in many locations didn’t benefit so well, especially where there was a high supply of condos near Tysons Corner.
Buyers will be looking to get ahead of the wave of Amazon employees snatching up homes before the new employees arrive. I predict that now that the decision has been made, sellers who’ve been waiting for the announcement will make the decision to put their home on the market. It’ll be interesting to see if that happens now or after the holidays.
How will it impact the area in general?
Crystal City is congested and better road infrastructure will need to take place and probably more schools will need to be added. Despite these few negatives, when a major company announces they want to call the DC Metro Home, we all benefit. A few years ago we saw Exxon Mobil move from Falls Church to Texas and we have seen other major companies like Nestle, Bechtel, Microsoft, BAE Systems take their place. The DC Metro Area is attractive to corporations. That’s for sure and that will help insulate us from the market shift that’s occurring in other parts of the country.
What does it mean for those considering buying or selling in the near future?
Don’t panic! Call me. I eat, sleep and breath real estate. We can work out a plan that is beneficial to you and your real estate goals. Amazon is not coming tomorrow, we have a little time to get your ducks in a row and make a plan for getting your house on the market and/or finding a new home.
The DC area is used to change and influxes of people. We adapt and adjust. We widen lanes, build more train tracks, or are asked to spend $30 to drive four miles!. I really believe that this move by Amazon will have a positive impact on the place we all call home. Welcome, Amazon!
Market Types: 0-3 Months = Sellers Market / 3-6 Months = Balanced Market / 6+ Months = Buyers Market
As you can see, though the average time is creeping up, the time is still low and we are still in a seller’s market.