Z-Real Estate
Z Alexandria Real Estate Beat: The AMAZON Effect
Is it Influencing Alexandria Real Estate Already?
By Sue Goodhart
ALEXANDRIA, VA- Back in January, I predicted the first half of 2019 would be a strong real estate market in Alexandria due to low interest rates and the announcement of Amazon and the Virginia Tech Innovation Campus. That hunch came true and then some. We saw remnants of the early 2000s, with properties receiving 8-12 contracts and buyers removing all contingencies. We predicted inventory would be low and it is. Some sellers are deciding to rent or waiting to sell to see how much impact “The Amazon Effect” will have on home values. Granted, for those heading out of the area or planning to downsize, that strategy could be a good one.
However, for those hoping to move up or move laterally, there may be no gain in waiting. If you own a townhome that is worth $500,000 and you wish to move up to an $800,000 property, a 10% increase in price means that your home would be worth $550k but what you want to buy would be $880k. The gap would be $330k instead of $300k. As for renting your home, there is some risk in that as well. New apartment buildings are going up everywhere. If you have enough of a gap between your monthly payment and the rent you can capture, it could be a good bet. If not, be prepared to cover that gap and the months it can go vacant waiting for tenants.
Let’s look at the stats.
As of the end of April 2019, the total inventory of available homes in Alexandria City was 165 compared to 416 at the end of April 2018 – that is a 60% decrease in active listings. Reflecting the vacuum cleaner-like way that buyers have been sucking up inventory, new under contracts in April 2019 was 246 compared to 117 in April 2018 – an increase of 110%! So, less inventory and faster absorption.


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