A projected influx of some 50,000 new, highly paid employees in the city that wins the sweepstakes to become Amazon.com Inc.’s (NASDAQ: AMZN) second headquarters (HQ2) will be a bonanza for owners of rental properties in the lucky city. The winner will be nothing short of transformed.
When Toyota moved its corporate headquarters to Plano, Texas, the median home sales price jumped by nearly 10%, sharply higher than the 6.1% increase the city had seen in the previous year. And that was only about 4,000 new jobs.
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Realtor.com chief economist Javier Vivas observed:
The city that gets selected will immediately see a boost to jobs and wages, pushing home values up and triggering new construction in neighborhoods within commuting distance from the headquarters location.
The cities and regions that remain in the running are Toronto; Atlanta; Austin, Texas; Boston; Chicago; Columbus, Ohio; Dallas; Denver; Indianapolis; Los Angeles; Miami; Montgomery County, Maryland; Nashville, Tennessee; Newark, New Jersey; New York City; Northern Virginia; Philadelphia; Pittsburgh; Raleigh, North Carolina; and Washington, D.C.
Median rents for a one-bedroom apartment in New York, Boston and the District of Columbia on January 1 were $2,070, $1,660 and $1,310, respectively, according to Apartment List. Rents could rise up to 0.2% in New York, up to 0.8% in Boston and up to 0.5% in Washington on top of the typical annual increase of a few percentage points.
Home prices could rise even more (a la Plano) because many of the cities Amazon is considering have little room left to build new housing. Already high median prices — New York’s $470,050, Boston’s $489,950, Washington’s $415,050 — could soar even higher.
Housing economist Andres Carbacho-Burgos told Realtor.com:
Everything depends on the particular metro area and the amount of room it has for expansion. There are some inland metro areas in the suburbs that still have plenty of room for sprawl.
Location, location, location.