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Illustration: Rebecca Zisser/Axios

The Northern Virginia housing market has tightened dramatically in anticipation of Amazon's HQ2, where buyers and sellers have been scrambling for months to lock up properties and take advantage of the new demand.

Why it matters: Amazon’s move into Arlington, VA — the first of 25,000 employees will arrive in June — comes as large tech companies are being blamed for fueling inequality and gentrification in major cities around the country.

The big picture: In Seattle, Amazon's home, housing prices have doubled over the past 6 years. The Washington, D.C. market is already feeling the Amazon effect.

  • Prices are rising and the market is tightening, according to real estate agents.
  • Available inventory of units on the market in the Arlington and Alexandria areas near the Amazon project has dropped disproportionately compared with the rest of the region since the HQ2 plan was announced, said David Howell, executive vice president at McEnearney Associates.
  • “I’ve been studying this market for 35 years, and I’ve never seen a circumstance like this one," Howell said. “There has certainly been a bit of a boomlet in the area right around what they’re now calling National Landing."

Critics of the project worry rising prices could force current residents out of the neighborhoods around Amazon's campus-to-be.

By the numbers:

  • Per a new report from Redfin, home prices in Arlington were up nearly 18% year-over-year in April. That far outpaces the price change in the D.C. metro area of 2.7%. (Howell's own figures for price increases around the HQ2 site pegged them lower than that, at less than 10%.)
  • Supply of homes is down almost 42% in Arlington, and the typical home is selling in just 6 days, per Redfin.

"Access to housing is a concern in communities throughout the US, including Arlington. One of the things that drew us to this location was the plans the County and the Commonwealth have in place to address this issue," said an Amazon spokesperson in a statement, noting the company plans to grow its footprint slowly.

  • "We plan to hire people who live here so the impact on the region will be minimal," the Amazon statement also said.
  • JBG Smith, the developer of the Amazon project, also launched a program last year to promote affordable housing.

What's happening: Homeowners are holding onto their houses in the hopes that they can sell for higher prices once the HQ2 project expands, according to multiple area agents.

  • Homeowners that do sell have been getting multiple offers and feel emboldened to consider asking for more.
  • Marcia Burgos-Stone, a listing agent with Redfin, said that a client emailed her right after Amazon announced its HQ2 plans in November asking if he should raise the price of his home by $10,000 to $20,000.

Buyers have been rushing to lock in sales before Amazon’s presence bumps up prices.

  • “I had a lot of buyers get off the fence that week,” said Shaun Murphy, a real estate agent for Compass, who bought ads immediately after the announcement in an Arlington zip code. “They’d been searching, and they knew they had to act.”
  • Murphy said that a single house in Del Ray, a neighborhood near the Crystal City HQ2 site, got offers from 15 buyers. Ten bidders agreed to pay hundreds of dollars to have the home inspected before offers were accepted in the hopes of having a more competitive offer — even if it meant losing money if the deal didn't happen.
  • "[T]he buyers are saying, ‘Please let me have this, what can I give you? Can I please have your house? Here’s more money,'" said Burgos-Stone.

And speculators are circling the neighborhoods close to the HQ2 site. Some area residents have put up no-solicitation signs, to stop a crush of investors from knocking on their doors offering to buy their homes, Murphy says.

  • Right after the announcement, individuals outside the U.S. started calling a Virginia office of McEnearney Associates inquiring about property in the area, said Howell, although it's unclear how many of those people actually bought.

Yes, but: "It’s still too early to tell what Amazon is going to end up doing to the housing market," says Jeannette Chapman, who researches development in the greater Washington area at George Mason University. Even before Amazon, the D.C. area has high housing prices and low inventory thanks to a strong job market and a lot of major employers.

  • "Amazon is a really easy thing to point to in a nutshell to explain why our market is X, Y or Z, but we have a lot of other things that are going on here."

Go deeper

Supreme Court agrees to hear challenge to affirmative action at Harvard, UNC

Photo: Al Drago/Getty Images

The Supreme Court on Monday agreed to hear a pair of cases challenging the consideration of race in the college admissions processes.

Why it matters: The conservative high court's ruling could determine the future of affirmative action in higher education.

Europe's energy reliance on Russia is a crucial shield for Putin

Photo: Pavel Bednyakov/Sputnik/AFP via Getty Images

Cracks in the NATO alliance regarding sanctions for Russia should President Vladimir Putin order troops into Ukraine are in large part based on energy supply concerns.

Why it matters: Russia holds tremendous leverage over some European countries because it provides roughly 40% of Europe's natural gas supply. In Germany, this figure is greater than 50%.

Why the Fed might want to jolt the markets

Fed chair Jerome Powell at a hearing earlier this month. Photo: Brendan Smialowski-Pool/Getty Images

So far, financial markets are cooperating nicely with the Federal Reserve's efforts to restrain inflation. They're doing the Fed's work for it by creating tighter financial conditions, in a distinctly non-panicky way.

  • But as the central bank's policymakers meet this week, an underlying question they face is whether the adjustment is happening too slowly.