If there is a bull’s-eye when it comes to the impact of the pending Amazon arrival on the local real-estate market, it is ZIP code 22202 in the Crystal City area.
Listing prices are up significantly. When available properties can be found, that is.
“This severe lack of inventory in 22202 could be the result of homeowners waiting for their property values to peak as the official opening of HQ2 grows closer,” said Chris Finnegan, vice president of marketing and communications for Bright MLS, which tracks real-estate data across the Mid-Atlantic region.
From the moment Amazon announced plans to bring its HQ2 to the Crystal City/Pentagon City/Potomac Yard corridor – and even before – the market in 22202 has reacted, in part due to speculators gobbling up properties at ever-higher prices:
• The median listing price for homes in November 2018, right after the announcement, was $1,369,900 – up 76 percent from a year before.
• By June of this year, the median list price of $1,599,000 was its highest ever.
While the relatively small number of sales in any given ZIP code during a month provides a caution not to read too much into the data, there appears no doubt that properties – particularly single-family homes – that have been put on the market since the HQ2 announcement have been priced at a premium, Finnegan said.
“These higher prices could be the result of homeowners looking to benefit from the prospects of future appreciation in the area,” he said.
The 22202 ZIP comprises about 4 square miles – about 15 percent of Arlington’s total geography – with 15,500 residential units, the bulk of them rental apartments but also including everything from starter condominiums to larger single-family homes.
As in much of Arlington, recent sales activity in 22202 has been down, driven largely by the dearth of available properties on the market. As of July 25, there were just 14 homes on the market in 22202: six single-family properties, two townhouses and six condominiums.
Betsy Twigg of McEnearney Associates noted that, in all of 2018, 236 properties sold in 22202 ZIP code – 77 single-family properties, 27 townhouses and 132 condominiums – or about 19 per month. So far in 2019, there have been 75 properties sold – 25 single-families, four townhouses and 46 condos – working out to about 10 per month.
Twigg calls the current situation “a classic economic conundrum,” akin to the eternal question of which came first, the chicken or the egg.
“There is very low inventory in the 22202 ZIP code, and it is selling faster and at high prices (varies among housing type) than in 2018,” Twigg said. “However, is the low inventory a result of Amazon and demand for houses, or is the low inventory a restricted supply, caused by people waiting to sell until Amazon has a bigger impact on prices?”
Whether it’s one or the other factor – or a combination – “there is no question that the current tight inventory every real-estate agent and buyer is experiencing is due in part to Amazon,” said Natalie Roy of Keller Williams Realty Metro Center.
And it is not just in 22202.
“Every ZIP code in Arlington has been affected by Amazon’s announcement,” Roy said. “Whether it is prices, inventory or demand, all things real estate have been impacted, from Day One of the announcement. Numerous people are delaying selling now, in the hopes that values will increase significantly in the next few years.”
Inventory has tightened significantly across Arlington, with the 245 properties on the market at the end of June down more than 55 percent from the 553 properties available in June 2018. The number of new listings coming on the market during the month was down about 27 percent from a year before.
That shortfall is impacting sales totals: The 267 Arlington residential properties that went to closing in June represented a drop of 20.5 percent from a year before, according to figures reported July 11 by MarketStats by ShowingTime.
Despite higher average prices, the total sales volume for June countywide stood at just under $197 million, down 9.6 percent.