Renters and homeowners are likely to see some changes in the very near future if Amazon decides to select their city for its second headquarters in the country. Amazon accepted proposals from cities all across the country after they announced in September that they were actively seeking cities to host the second headquarters. They did have a short list of limitations requiring the metro area to be home to at least 1 million people, and it must have an international airport with constant access to flights back to Seattle.
Possible contenders include Boston, Newark, Baltimore, and New York City. Wherever Amazon does decide to locate HQ2, home prices are going to surge in the area. Look at what happened to Seattle when Amazon made their headquarters there seven years ago. Rent for homes in the area surged by 47 percent and home prices for buyers a whopping 83 percent, according to the popular real estate website Zillow.
HQ2 will also draw other businesses into the area, further limiting space available and increasing demand for real estate. Realtor.com chief analyst Danielle Hale predicts that the impact on the housing market will largely depend on the flexibility of the industry. Here are three likely changes the city with the winning bid will see.
Renters Will Struggle
Landlords capitalize on rents when cities expand and businesses enter. Renters may struggle to afford their homes if landlords decide to increase rent due to demand. The safest option for renting is probably to wait it out and see how things turn out. A prolonged lease can also provide additional security because it locks the rent amount in for a specified time.
Time to Buy
Once Amazon announces where they’re going, it’s a wise decision for renters who are considering homeownership to take the leap and go for it. Rates are low, and the market is stable, making the purchase a valuable investment for the future. Examine options such as down payment assistance to make it possible to buy sooner rather than later.
Current homeowners will see the value of their homes rise if HQ2 locates nearby. It will allow owners to build equity in their homes and consider refinancing for a more favorable rate which can be detrimental if property taxes increase or the cost of living increases, but it’s necessary to evaluate the entire situation before deciding to move from the area.