Prime Real Estate: Amazon HQ2 Adds $200,000 To Crystal City Home Prices

Summer is usually when real estate activity starts to slow down in the Washington, D.C. area, but not so for the neighborhood surrounding Amazon’s future headquarters. Something seismic may be about to take place. Inventory has plummeted, and the median sales prices for the few homes that did sell in July was $200,000 higher than the median price for sales the same time last year. This is the Crystal City neighborhood within Arlington, Virginia, where, as you can see from the graph below, home prices have been on a relatively steady increase year-over-year ever since the HQ2 announcement last November. But it wasn’t until last month that the steady increases took a sharp turn upward.

We started seeing precursors to this just two months ago in May when the median sales price rose by $110,000, according to a report by Realtor.com. Then the multiple listing service, Bright MLS, released June numbers in a press release stating the asking prices for single-family homes increased 99.9% since June the year before. As I mentioned when the news broke, Crystal City is made up of mostly condos and apartments, so single-family homes are definitely a hot commodity in this neighborhood.

Here’s a rendering of the overhead view for the proposed development once it is complete, which shows it is mostly multi-family and office buildings in the vicinity. For a video tour, complete with animation of a drone delivering a package to one of these buildings, head to the website for the entire project.

Almost as soon as the news hit the wires, those in local real estate responded with ads such as this one crying out, “Buy Now Before Amazon Arrives” and users of Zillow began “favoriting” homes at a higher rate than anywhere in the greater D.C. area. A rep from Zillow told me that for Arlington as a whole (not just the Crystal City neighborhood), favorites on condos increased 12.7% in the two months after the announcement (compared to the two months prior), while favorites on condos for the D.C. area had decreased 1.9% in the same time frame.

Surrounding neighborhoods have seen prices start to increase and local homeowners responded by not putting their homes on the market, as you can see in this graph showing the sudden drop off in active listings for the same zip code.

Only 11 home sales took place in July (out of 13 active listings), which normally wouldn’t be much to draw a trend from. But the fact that prices are already an extra six figures higher than just two months prior is significant. The fact it took place in the slow month of July? Even more so. Additionally, this was the first month in the past ten years (the longest the data are available) that showed median prices closing above their asking prices, which is usually a sign of bidding wars taking place. Sold prices were only a hair over original list prices, with a ratio of 101.5%, but since this is the first time it has happened in recent memory that surely is a sign that a fundamental shift has taken place.

As for the urgent counsel to buy before Amazon arrives? It may already be too late.

This post first appeared on Forbes.com. To see the original, click here.