Amazon announced two new headquarters last year. The locations that were selected were New York and Northern Virginia. After a great deal of outrage in NY, the company decided to pull out of that location.
The Virginia location is still a go.
What effect does this have on housing?
If the prices over the past year is any indication, we see a major impact.
Home prices in Arlington Country are up 21% while prices in Manhattan are down 15%. There could be, of course, other factors in play.
Arlington Country also saw available housing drop to 26% over that time.
Amazon has a track record of providing a boom to real estate prices. In Seattle, where it is headquartered, home prices rose 72% in the past 15 years.
One of the main complaints in New York was the fact that Amazon would push home prices up to the level where most cannot afford. However, even after the drop in prices, the properties in Manhattan are still out of the price range of most.
The other gripe was the tax incentives the company received. This backlash caused a great deal of publicity, more than the company was willing to accept. Thus, it pulled out taking the potential jobs with it.
Overall, the City of New York is in trouble. Many feel that it could be facing bankruptcy when the next recession hits.
President Trump made news when he declared that he was going to make Florida his place of residence after he leaves office since the taxes are too high in New York. Areas like Chicago, New York, New Jersey, and California have seen an exodus of many wealthy who seek to alleviate their tax burdens.
Part of Trump's problem is going to be that, while it is easy to declare residency in one state, one has to prove that he or she has none left in the previous. With his real estate holdings and desire to run him companies, he is going to have a difficult time proving he is no longer in New York.
That said, the area near his present residence is booming. The Northern Virginia area is suffering from a major shortage in housing. Between the expansion of government spending and Amazon, this is a boom time.
One of the problems with Amazon is things usually take off when it first enters an area because of jobs created. Obviously, there is a construction boom providing jobs. However, this is a company that is looking to automate all it can. This often ends up costing people who were first hired by the company to be let go.
For Virginia, I do not see this happening. This is an office system that is being implemented as opposed to warehouse. Those jobs are going to remain for a while in my estimation.
Amazon is quick to claim the effect on housing is temporary. We will see if this is the case. Logic tells me that creating good paying jobs in an area to the tune of 10,000 plus is going to have an effect on the area. In this instance, it has to be a positive.
Compare that to an area such as those in rural Ohio which were devastated by the loss of manufacturing.
Personally, I would opt for the Amazon effect if such a thing exists.
If you found this article informative, please give an upvote and resteem.