When Amazon first announced in January its shortlist of 20 location candidates for a second headquarters, the real estate industry lit up with speculation around which city will reap the profound housing and local economic impacts of 50,000 new jobs and $5 billion in development.On March 1, Zillow kept the guessing frenzy going with a press release revealing the top two predicted contenders, according to its 2018 Zillow Home Price Expectations Survey.
The company asked more than 100 housing and economics experts to guess what city they think is most likely and least likely to be chosen as Amazon's second headquarters. Consensus showed Atlanta, GA or Northern Virginia as popular frontrunners, with Austin, TX and Raleigh, NC coming in close behind.
Regardless of which city ultimately lures the online retail giant, every finalist on Amazon's top 20 list holds appealing qualities from a real estate investment standpoint — something to keep in mind if you're researching locations for your next rental investment property.
“I’m not smart enough to know where HQ2 will ultimately end up, but I do think there is a lot to like about the collection of 20 cities that are finalists," Roofstock CEO Gary Beasley observed. "The folks at Amazon are no dummies. Each of these cities has some unique qualities that merit consideration for real estate investment, irrespective of what city Amazon actually chooses.”
What the housing and economic experts like about Atlanta
- Fourth lowest home values and rents, making it an attractive option for Amazon
- One of the most affordable markets in the country
- Undergoing an urban renaissance with new public infrastructure, which provides attractive opportunities for employers seeking to lure young urbanites
- Land availability
- Business-friendly tax codes
What the housing and economic experts like about Northern Virginia
- Close to a highly educated workforce and a well-developed public transit infrastructure in the D.C. area
- Would put Amazon at the doorstep of the nation's top policymakers
- Growing tech workforce and easy access to Washington D.C. policymakers
Home values in Seattle, where Amazon's headquarters is based, have almost almost doubled and rents have increased by half. Not all of that boom is directly attributed to Amazon, but the company's growth has created a business environment that has attracted many other employers to the Seattle region, Zillow points out.
"As the experience of Seattle suggests, Amazon will not only directly bring thousands of high-paying jobs to the chosen city, but also has the potential to transform the regional economy," said Zillow Senior Economist Aaron Terrazas. "The local jobs boom that Amazon's HQ2 promises will spur demand for the full spectrum of housing types – ranging from urban apartments to suburban single-family homes."
Among the 85 experts who responded to Zillow's Home Price Expectations Survey:
- 12 said Amazon is most likely to choose Atlanta
- 12 selected Northern Virginia
- 11 selected Austin, Texas
- 9 selected Raleigh, North Carolina
- 6 selected Denver, Colorado
Los Angeles, Newark, New York and Miami were the cities respondents said were the least likely to be chosen by Amazon. Reasons include high housing costs, traffic and an unfavorable tax environment.
Many cities that bid to become Amazon's second headquarters offered tax breaks and other benefits to the company, which will likely be considered alongside reasons cited by experts, Zillow noted.
Amazon is expected to announce its choice sometime in 2018.
Here are the cities that made the top 20 finalists out of 238 original applicants:
- Atlanta, GA
- Austin, TX
- Boston, MA
- Chicago, IL
- Columbus, OH
- Dallas, TX
- Denver, CO
- Indianapolis, IN
- Los Angeles, CA
- Miami, FL
- Montgomery County, MD
- Nashville, TN
- Newark, NJ
- New York City, NY
- Northern Virginia, VA
- Philadelphia, PA
- Pittsburgh, PA
- Raleigh, NC
- Toronto, ON
- Washington D.C.
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