When Amazon announced it was planning to build a second headquarters in North America, tons of cities put on their Sunday best and tried to woo the mega corporation.
But, why?
As Seattle Times columnist Danny Westneat put it, Amazon would undoubtedly be detonating a “prosperity bomb” in the winning city. He saw it happen firsthand in Seattle, home to Amazon’s original HQ.
“For those of us lucky to be born early enough to buy a house back in Seattle WA (Before Amazon) this explosion has transformed us into assessed-value millionaires,” wrote Westneat.
In November 2018, it was revealed that Amazon HQ2 would break ground in Crystal City, which is a neighborhood in Arlington, Virginia. And as of July 2019, it seems like that “prosperity bomb” has already gone off.
The latest ranking of cities by Redfin Compete Score shows that the two most competitive US housing markets are the ones closest to Crystal City: Arlington and Alexandria. Redfin creates the list based on how quickly homes are going under contract, how many homes sell above list price, and how hard it is for buyers to place a winning bid on a home.
When it comes to how quickly homes are going under contract, here are what the numbers looked like in July 2019, according to Redfin:
- National median: 38 days
- D.C. metro area median: 27 days
- Alexandria median: 14 days
- Arlington median: 11 days
And how many of those homes are selling above list price?
- 46% of homes in Arlington (vs. 27% last year)
- 36% in Alexandria (vs. 24% last year)
- 32% of homes in the D.C. metro area
- 24% of homes nationwide
One primary reason these homes are selling above list price is simple supply and demand. The number of homes for sale in Arlington and Alexandria fell by approximately 50% year-over-year in July. Less homes means more competition in a hot housing market.
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