As Amazon HQ2 moves in to Northern Virginia, housing prices expected to go up

CRYSTAL CITY, Va. - Amazon's HQ2 announcement on Tuesday has brought on the quite the buzz for the DC-metro area. HQ2 is primed to make a major impact on local infrastructure as well as the housing market in Crystal City and the surrounding areas.

Amazon is calling its new home in Northern Virginia "National Landing," which encompasses parts of Crystal City, Pentagon City and Potomac Yard.

Most realtors agree the DMV will see a rise in home prices across the region, but differ on how fast it will happen and by how much.

"Based on what we have seen in Seattle, everyone is saying 50 percent, if not higher than that," said Justin Noble with TTR Sotheby's in Logan Circle.

By contrast, Christine Richardson, President-elect of the Northern Virginia Realtors Association thinks the rise of home prices in the area will be more gradual.

"We are not the same as Seattle. We have a completely different type of market. Much larger market -- very robust market. We were already expecting increase in property values anyway even if Amazon didn't come here," she said.

Real Estate Agent Jay Nix with Compass Realty said while Crystal City will be the center for a lot of action for the new headquarters, the area is older and will need some work before the boom really starts to happen.

"There's a lot of big buildings built back in the '70s and '80s, not turnkey. They need work, stepping back in a time capsule. So people have to think about that when they go to buy," he said.

"I don't think that immediately people will be clamoring to live in historic downtown Crystal City. It's going to take a couple of years before it's transformed and it will be in demand."

Richardson said she expects around 60 percent of the more than 20,000 Amazon workers will be coming to live in Northern Virginia. She says 60,000 new homes could be built, but agrees with Nix that it will take time for both new development and updates.

"I think we have had our buildings out of the market for awhile. They all kind of left in 2007-2008 and have been slow to come back," she said.

"I think we will see some infill building too. A lot of the areas in Arlington are older, so there will probably be some builders taking advantage of that and updating the housing."

Meanwhile, Noble said he expects to expand his millennial clientele once tech giant Amazon moves in across the river.

"I think there will be a three-to-five year sweet spot. It will be muted at first, but I think it will increase. I would say buy now before it gets really crazy."

By contrast, Nix said real estate prices are beginning to see some spike, for the most part, he anticipates buyers and sellers will be waiting before making a decision.

Nix said the first big impact will be for renters, as those who come to the DC-metro area for work tend to rent out condos and apartments before making the bigger decision to buy.

"The immediate impact we've seen, one agent raised the price of two condos in Crystal City by $20,000. I think we need to take a breath and see what happens," he said.

Noble and Richardson agree that while the rental market will be the first to hit, it won't be impacted as much in the long term.

"I think there will be an increase in people renting at first, feeling out the area and then feeling more comfortable. A year or so after they've leased an apartment to buy and get in," said Noble.

Noble and Nix agree that the biggest expected increase in DC home prices will be along the Blue and Yellow metro lines.

Nix said people should consider buying homes in Potomac Yard, Del Ray, Shaw, Mount Vernon Square and Alexandria.

Other potential buyers could be waiting for a little while to save up or make the decision to move elsewhere -- retirees in particular.

"The person who really needs to wait is somebody who is thinking about retiring and leaving the area because if they wait a couple of years -- five, 10 years and know they'll retire to say, Florida, or the Carolinas or somewhere south of here warmer, then they don't have to worry about buying something else. They can sell that house and make a big profit -- hopefully," Nix explained.

He also said buyers really need to consider interest rates, which will be going up in the next few months.

Housing costs in Arlington County are already high as the average income for the county is $110,000.

Christian Dorsey, the vice chair of the Arlington County Board, said they will need to ensure the workers Amazon brings to the region are going to be able to afford it.

"It makes it even more important that our community works with the regions, increase the supply of housing," he said. "One of the things that makes housing so expensive here is that we have areas that are not zoned for higher levels of density. We have got to do that where appropriate."

As word spread in the last few weeks that Crystal City was on the shortlist to land Amazon, housing demand has skyrocketed. Real estate firm Redfin told FOX 5 that in the first 11 days of November, views of homes for sale in Crystal City were up 210 percent from last year.