Good luck trying to buy a home in Northern Virginia these days. Arlington and Alexandria, the jurisdictions surrounding Amazon’s highly anticipated headquarters, are the two most competitive housing markets in the country, finds a new report from real estate company Redfin. Redfin’s findings, based on the number of competing home offers and other data, represent additional evidence of an “Amazon Effect” that’s boosting area real estate values.
Arlington, where Amazon’s “HQ2” site will initially be located, and Alexandria each scored 96 points in Redfin’s rankings, placing them on par with Grand Rapids, Michigan (96), and above Tacoma, Washington (95), and Oakland, California (93). “In the HQ2-adjacent cities, homes are going under contract far faster than the national rate or even the D.C. metro as a whole,” Redfin points out. “Homes sold in July went off the market in a median 11 days in Arlington and 14 days in Alexandria, about a week less than last July in both and far lower than the 27-day median for the D.C. metro and 38 days nationally.” By comparison, two-in-five homes throughout the entire D.C. metro area went off the market in two weeks or less.
Current homeowners in Arlington and Alexandria seem to be holding onto their properties: The total number of listings in July 2019 were about half of what they were the year before. That’s driving an increase in sale prices, Redfin notes. Forty-six and 36 percent of homes in Arlington and Alexandria, respectively, sold for above their asking price, as compared to 27 and 24 percent just last year. Meanwhile, this rate for the D.C. metro area was 32 percent in July 2019. The table below depicts the median sale prices and other metrics for that month.
In addition to the number of competing offers, Redfin looked at waived contingencies, sale-to-list price ratios, and the number of days on market to calculate its “Compete Scores.” The company’s chief economist, Daryl Fairweather, says many potential buyers expect Northern Virginia home values to keep rising. (Officials have rebranded this area “National Landing.”)
“If you believe home values will go up hundreds of thousands of dollars in the next five years, you will race to bid five or ten thousand dollars above asking price today,” Fairweather says in a statement. “So, even though it may take a decade for Amazon’s HQ2 to grow the size of the [company’s existing] Seattle headquarters, attracting high-earners and driving economic growth in the surrounding area, homebuyers and home sellers are already operating under the assumption that there will be strong demand for homes going forward.” Amazon has promised to hire at least 25,000 employees to work at its Northern Virginia headquarters. It’s poised to be one of Northern Virginia’s largest employers, just like the defense industry.
Other recent real estate reports about homes in the vicinity of HQ2 have found double-digit increases in the median list price in Arlington County and a near-doubling of the median list price for single-family homes in the ZIP code where the headquarters campus is being built.