By Chloe Aiello
Amazon's planned HQ2s in New York and Virginia will be a boon for homeowners near the complexes ー but for renters and potential home-buyers, it's a bit of a different story.
Home prices and rents in the areas immediately surrounding the new headquarters are expected to rise rapidly, so renters looking to buy near Amazon's ($AMZN) new HQ2 locations might want to consider rushing their shopping process or just contemplate looking elsewhere, according to Danielle Hale, chief economist for Realtor.com.
"If you're looking, if you haven't purchased yet, or if you're a renter it's going to be challenging to see those prices go up," Hale told Cheddar on Wednesday.
Amazon confirmed on Tuesday it would split its new headquarters between Long Island City in Queens, N.Y., and the Crystal City neighborhood of Arlington, Va. The backlash flared almost immediately, especially in New York, where reports circulated that speculation was driving condo sales in Queens along the East River.
Hale said renters and homebuyers have reason to be concerned. Realtor.com studied the impact of Amazon's original headquarters expansion on property pricing and rental costs in the city of Seattle, Wash. She said that areas closest to the headquarters ー within a one mile radius ー rose at double the rate as values of properties elsewhere in the county. And those areas within an easy commuting distance will also experience serious gains.
In New York, that means Long Island City out to Sunnyside, Queens ー and even across the river to parts of Manhattan. In Virginia, that means Crystal City, Alexandria, and the whole Potomac Yard area.
"It's not immediate, but it is quick," Hale said, which could be devastating for renters looking to buy.
"When your rents go up, it does make it harder to save to become a homeowner. And at the same time, you are looking at your home prices increasing. It's just another challenge to getting into the homeownership market," Hale said.
But for homeowners or those looking to buy now or buy soon, it could provide a unique opportunity.
"There were bigger increases in the areas between one and five miles over the 10-year period, but they didn't happen in the first year. So if you're looking for an area of opportunity, you might want to be close to the proposed location, but not in that one mile radius," she said.
Of course, Long Island City and Crystal City aren't Seattle. Especially for a city on the scale of New York, Amazon's impact could be a bit more muted, Hale said.
"The same distance analogy might be a little different in New York, because it is so much denser than Seattle," she added.
For full interview click here.