Home prices are soaring in the region in the wake of Amazon’s decision to locate the lion’s share of its second headquarters (known affectionately as HQ2) in Northern Virginia. According to a report this week in the Washington Business Journal, the Amazon effect is acting “like some kind of real estate black hole.”
Namely, as the article by Jonathan Capriel states, home prices in the 22202 zip code on top of where the new headquarters is going in Crystal City, have soared by 72 percent in July over June, and by 25 percent year-over-year. Crystal City is part of Arlington County, the City of Falls Church’s immediate neighbor to the north and east.
The article, entitled “Housing Index: July Home Prices Near Amazon HQ2 Soar to Highest Levels in a Decade,” quotes Chris Finnegan of Bright MLS, who says, “Part of the reason for that bump in prices is that owners are holding onto their homes for longer in hopes of scoring a big sale. That means that any home that does make it into the market is sold at a premium.”
The “Amazon effect,” he surmises, “is encouraging homeowners to list their property much higher than they did the year before, with the median price in July for Arlington County nearly 45 percent higher than last year’s.” The biggest price increases were in the Aurora Highlands and Arlington Ridge neighborhoods of the county.
The shock waves being generated by the Amazon impact have already led to major new development plans for Virginia Tech both in Arlington and Falls Church, and the expectation of a boom in relocation of Amazon satellite industries to the area. The demand for housing for the prospective new legions of well-paid executives, professionals and employees for all of this is guaranteed to spread to Falls Church, where the added bonus of a highly-valued K-12 International Baccalaureate public school system makes its housing options even more attractive.
When will the impacts begin registering on geiger counters in the Little City, beyond just as the anecdotal impressions of realtors and prospective buyers or renters? Who’s to say, especially while most pundits are still cautious that a looming recession might undercut everything.
But for City of Falls Church demographic trends, such as those written into the new Comprehensive Plan chapter entitled, “People, Housing and Jobs,” can only be expected to accelerate under the influence of the Amazon effect.
The Falls Church City Council formally adopted the chapter at its meeting Monday, the first revision of the chapter since 2005.
The key trends identified in the chapter include:
• The number of single-person households is on the rise, now representing one out of every three F.C. households. The number of people living alone has jumped by 20.8 percent over five years, the highest rate in the region, with more than two-thirds being under age 65 (68.4 percent). The chapter identifies the causes as reflective “of a diversifying housing stock, delayed household formation within the Millennial generation and an aging of the Baby Boomer population.”
• The number of households with children has declined in recent years. But still, the number of school aged children has increased, driven by larger families, specifically, homeowner households with three or more children.
• The City’s population is aging, with one in four residents aged 55 and up, and the expectation is that this trend will continue as the youngest baby boomers enter this age range.
• Households with incomes between $50,000 and $100,000 have surged, driven primarily by the increase in single-person households. However, between 2000 and 2017, most household growth in the City was among households with an annual income exceeding $200,000 annually (a total of 1,031 households in that range now).
• There are now more multifamily units than single family detached units, a development of the last five years.
• Many Falls Church residents have jobs in high-paying industries, nearly half of all employed City residents working in public administration or business and professional services.
• Many of the jobs located in Falls Church are in lower-paying industries, with one in four in retail and hospitality-related sectors.
• Two job sectors employ nearly half of all City employed residents, about 50 percent in either public administration or professional and business services, and half in a variety of sectors such as education services, health care, and information, finance, insurance and real estate services. Less than one percent are in the Armed Forces, and the median annual wage of employed Falls Church residents is $67,684.
• One in every four jobs, 25.7 percent, located in Falls Church are in retail and hospitality-related sectors. Another 23.2 percent are in education and health care. The median annual wage of Falls Church-based jobs is $38,412.
The chapter is short on meaningful proposed strategies going forward beyond encouraging the development of Class A office space to “provide opportunities for higher wage jobs to locate within the City.”
Projections of population, housing and job growth in the City, however, have to be treated as highly suspect, given the unknowns about the ripple effects of Amazon and related developments, and the health of the region’s economy against political and recession-related trends.