HQ2 selection sends housing market into a frenzy
The number of contracts signed between Northern Virginia home buyers and sellers surged 90% in November compared to last year, just after Amazon.com Inc. AMZN, -4.01% announced plans to locate an additional headquarters in that area.
In November, 1,046 such contracts were signed, compared to 533 in November 2018, the Northern Virginia Association of Realtors said Friday. Pending sales — those that have entered into contract, cleared all contingencies, and are ready to proceed to close — were up 11.5%. “We believe these spikes may stem from one reason: the Amazon effect,” the Realtor association noted in a press release.
The area covered by the “Northern Virginia” association is broad: Fairfax and Arlington Counties and municipalities including Alexandria, Fairfax, Falls Church, Vienna, Herndon, and Clifton. In the markets closest to the planned “HQ2,” the Amazon effect was even more pronounced. Pending sales in Arlington were up 46% compared to a year ago, and those in Alexandria were up 27%.
“Demand will drive sales,” the association’s president, Lorraine Arora, said. “If we could only create a solution for our affordable housing challenge: our inventory is lean at low price points and that must change.”
The surge in sales — and, likely, prices — is one reason some housing advocates and community leaders are worried about Amazon and another big real estate trend looming ahead. “Opportunity Zone” investments may simply encourage speculation before actual market changes ever take place, some sources have told MarketWatch.
