It’s official! Amazon is coming to Northern VA!
While the mood in DC about this announcement seems mostly positive, there are certainly some residents who are concerned about rising home prices and increased commuting times. The good news is that there won’t be 25,000 employees all starting work on the same day. This will be a gradual process that will take ten years. Arlington County is investing hundreds of thousands of dollars in transportation infrastructure to make sure it can keep up with commuter demand. And remember, there was once a time when the now vacant office buildings of Crystal City were full of workers and we all managed just fine.
We have been fielding calls from investors, home sellers, first time buyers and move up buyers asking us what effect this will have on them. We predict that many new Amazon employees will rent before they buy. For those relocating from out of town, it is common to want to “test out the waters” before committing to a house purchase. They will take 6 months or a year to decide whether they like the area and whether they think they want to put down roots. They will explore the various neighborhoods, test out commuting routes and research schools. When they do buy we predict they will primarily be in the 400-600K price range.
For this reason we think that rents will rise, although we don’t think it will be double digit increases. If you are currently renting anywhere near or in Arlington, VA it is probably a good idea to go ahead and get pre-approved for a loan and turn in notice to your landlord. Don’t worry, your landlord will probably be ok with it and raise the rent for the next tenant. Get into the market while interest rates are around 5%, rather than 6%. This winter is a particularly good time to commit to a home before the regular spring rush hits. I predict that home buyers who are looking in December and January, when the weather is the worst, will be able to snatch up some pretty good deals. Pay close attention to the proximity to commuting routes, metro and bus access will be key for relocating employees and it is smart to buy something that you can rent out or easily sell when you are ready to “move up.” Worried you don’t have enough for down payment? You may be happy to learn that many loan programs only require a 3% down payment, and it may be possible to find sellers who will assist with closing costs.
Investors are perfectly poised to take advantage of this situation as well. Particularly for properties with a 30 minute or less commute to Crystal City, it is a great time to purchase. We are seeing quite a few investment properties with tenants already in place, meaning instant cash flow for investor clients.
Have questions? Give us a call! 703-672-0038