It’s official. Seattle-based Amazon has finally chosen the locations for its two new headquarters. They’ll be setting up shop in New York City and Arlington, Virginia. This announcement has many in Seattle wondering how these changes might affect the local economy.
How might Amazon’s new offices affect the Seattle housing market in 2019? Will there be a reduction in the local workforce, leading to weaker demand for homes? And what would that do to home prices going forward?
The general consensus among economists is that the Seattle real estate market is finally cooling down. But that has more to do with affordability issues than Amazon’s new headquarters.
Will Amazon Decision Affect Seattle Real Estate Scene?
Most people who live in the Seattle area realize that Amazon has had a major impact on the local economy and housing market. The company has been headquartered in the city since its inception, back in the 1990s. And since then, it has boosted the economy.
Between 2010 and 2017, the company experienced tremendous growth and created a lot of jobs. This brought educated workers into the Seattle area from all over the country. This period of growth also coincided with a sharp increase in home values across the metro area (all of those well-paid workers needed a place to live).
It’s a familiar pattern seen in other “tech hubs,” including Silicon Valley and Austin, Texas. Upwardly mobile workers flood into the area, fueling the housing market and driving up home prices.
But now the company is opening up two new headquarters, both on the East Coast.
On November 13, Amazon posted the following on their company blog:
“Amazon today announced that we have selected New York City and Arlington, Virginia, as the locations for our new headquarters. Amazon will invest $5 billion and create more than 50,000 jobs across the two new headquarters locations, with more than 25,000 employees each in New York City and Arlington. The new locations will join Seattle as the company’s three headquarters in North America.”
This development has some wondering if Amazon’s expansion will affect the housing market in Seattle, its longtime home. And those questions come at a time when the local real estate market is already experiencing a cooling trend.
Market Is Cooling, But Mostly Due to Other Factors
The general consensus is that the development of two new headquarters on the East Coast probably won’t affect the Seattle housing market — or at least not in a significant way.
Consider the following:
In addition to buying a ton of new office space in New York and Virginia, the company has already committed to buying more square footage in the Seattle area. This includes an office tower in Bellevue that could create thousands of new jobs.
They’ve stated previously that they plan to continue hiring in the area, and that does appear to be happening. As of November 18, the company had thousands of Seattle-area job listings posted on their website.
The local real estate market in Seattle is clearly undergoing a shift right now. Price cuts are more common, home prices are rising more slowly, and more inventory is coming onto the market. But these trends have more to do with economic cycles and affordability than any decisions made by Amazon.
Bottom line: Real estate conditions are changing in the area, as we move toward the end of 2018. The Seattle housing market of 2019 will probably be very different from what we saw from 2015 – 2017. But Amazon’s East Coast expansion probably won’t play into that much.
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