Amazon drastically affecting property values?

[Andy W.]

  Amazon is supposed to be building a second location, estimates of 40,000 jobs, 5 billion or more invested into the areas surronding it. Chicago, Dallas, Denver, Detroit and a few more cities fighting for them to set up shop in thier town.

 If you owned a duplex, single family or multi family within 5 miles of this new location, how much do you think your property would increase after they announce the location? Maybe 150k to 200k? Or 400k to 700k? I'm guessing it would be massive. No correct answer to the question, just everyones opinions.

[Ryan E.]

You already have a case study with Aamzon’s first HQ. Look at Seattle pre-Amazon and then try to determine the impact Amazon’s growth has had on Seattle’s housing market. 

[Jake Recz]

Well... $100k seems pretty excessive in my opinion. It's not like amazon is gonna pay everyone in the neighborhood $50k/ year just because they live in the 5 mile radius of their warehouse. You have to remember those are minimum wage, or close to minimum wage jobs that they are providing. 

[Hau N.]

I did some Googling on the local impact of amazon warehouses on the local economy a while back.  It didn't help much if I recall correctly.  In fact, the tax credits Amazon received from the city benefited itself more than helping the local community.  The 2nd Amazon headquarter is different however.  I think will bring tremendous growth and increase real estate value locally.  It's hard to tell how much.  

[Ryan E.]

You already have a case study with Aamzon’s first HQ. Look at Seattle pre-Amazon and then try to determine the impact Amazon’s growth has had on Seattle’s housing market. 

[Steve DellaPelle]

Amazon is looking at some major cities that are already very high in terms of real estate prices, I don't see them going up that much more just because of the new HQ.

In my area of Boston, which is in the running, surrounding cities have already drastically increased in the last 10 years and it seems unlikely they would go even higher above the already ridiculous prices they are at.

Just one mans opinion.

[Christian Hutchinson]

Amazon HQ2 will bring in $5B in investment and 50K workers.  Avg wage pays $100K.

It doesn't matter where the building lands, the whole MSA will go up in RE Values.

Avg household is 3.3 people. So that means 150K people will job magically pop up in whatever MSA in the course of 5 years. Those people will need places to eat, get gas, buy cars, buy clothes, etc. ANYONE with an established business or in REI will see improvements. Even if you are renting mid-cost small ranch homes in working class neighborhoods, the rents will rise, because frankly, those workers in service type jobs will have more work to perform.

There will be more teachers, firefighters, etc also.

Me personally, IF my area makes it into the "playoffs" (word is Amazon will go to 3-5 finalists) I will begin getting houses under contract at all price points. I know the general area they would setup shop, so I would purchase some low-end housing, some-midgrade housing, and probably one higher end place. For a goal of maybe 5 properties with 8 units in total. Basically 2 duplexes, 2 ranches/bungalows, and 1 colonial/bi-level/tri-level because I want to rent to people making $80K a year and to people making $40K a year.

[Matt K.]

Unless you get lucky on a gentrifying area (early) then it might might not be as drastic as you think. High wage earners likely won't go buy up a MFH, sure maybe a few will but not most. The high wage earners are probably going to go live where other high wage earners already live. They will go live in that luxury condo that was already expensive or the old established neighborhoods that are already expensive. 

It also depends on the commuting culture of that city, in the Bay Area people will pay HUGE amounts to live close to the tech jobs. This only works because traffic is TERRIBLE like to the point where some people can't even comprehend it. This won't apply as much if people are used to commuting already.

[Carolyn Morales]

Amazon is effecting Jacksonville Florida in a major way with 3 facilities and possibly a 4th one in negotiations. I do not believe these are minimum wage jobs. One facility in particular is exacting growth in a zipcode we have 2 properties in that was considered very low density before.  The fuel/ truck stop/gas station industry is scurrying looking for new site development for new gas station convenience stores to accommodate the growth, more new apartments and Subdivisions have approval as well. I can't wait to see what happens when it is all done. 

[Jay Hinrichs]

Amazon is bringing in 2,000 jobs into troutdale Oregon.. I am building 23 homes right now within 10 minutes of the site. I have not seen any effect as of yet..  but I might be a little early.. we have 2 sold already pre construction.. but would be nice if we had a nice run of Amizonia buyers though.

[Gregg Madison]

If you mean HQ2, which would be a headquarters, it would be huge since most techie jobs pay >$100k. I'm in the Austin area, and they haven't made a run at it yet.

To answer the question, depending on the market, the $100-$250k range seems correct, but in some of the higher cost markets, the higher end may be close. It depends on the starting $/sq ft.

[Ben Winchester]

Jay Hinrichs where are you building in troutdale? My wife and I are looking to move at some point after we re-finance our condo we are living in now. The condo is by Edgefield McMenamins and we are planning on renting it with the Spike of more people from the new Amazon fulfillment center. I’d be interested to see what you are building and where. On a slightly unrelated note, since you are building close to Amazon, and Amazon is building so close to the troutdale airport, it’s just another excuse for you to fly in and check on your project haha.

As for the Amazon fulfillment center in troutdale OR increasing property values, id have to agree with Jay on that one. I haven’t seen any noticeable change outside of normal market increase. Amazon isn’t coming until July 2018 so like he said, maybe it’s just too early. I don’t think they’ve even started hiring therefore there is no demand increase as of yet. Once demand increases, I definitely expect an increase in values.

[Jay Hinrichs]

@Ben Winchester  our service center used to be at troutdale so been there many times.  all of 7 minute flight form Aurora state.. :)  anyway.. we are on 282nd and Orient.. can't miss us.  Being a BP member you get 1k off no questions asked :::)))

[Sam Shueh]

Assuming 5K jobs per site you need to be very close to bike riding distance to see a higher demand.  What has announced does not guarantee a surge in employment.  Amzn is not the kind of co where people will work for life staying there. If it is operation oriented the $18/hr jobs can create a home price depression during a recession. I may add apartment rents may rise because of some temp jobs created.

[Chris Grenier]

Anyone who would provide an “estimate” and ballpark figure of what could “maybe” “possibly” “potentially” happen is guessing as much as they would guess if asked who killed JFK.

[Andy W.]

Originally posted by @Account Closed:

@Andy W. As tempting as it may seem, betting on Amazon might be a bit risky for real estate. They have razor thin margins. Any change in the economy or trade relationships could change the equation.

 I don't plan on betting or buying on it. Just wondering about it, saw a TV show where the guests were debating it. One was a commercial developer, one a city planner and I think a CPA. Was just wondering what some investors would think about it.

[Andy W.]

Originally posted by @Chris Grenier:

Anyone who would provide an “estimate” and ballpark figure of what could “maybe” “possibly” “potentially” happen is guessing as much as they would guess if asked who killed JFK.

  But what fun is a forum without it? sheesh......

[Andrew Glenn]

Something I think is worth reiterating here: the growth that’s being mentioned here is not a new fulfillment warehouse. It’s a new headquarters. I’m hoping Austin lands it for a variety of reasons. Traffic will be a challenge.

Long term I do see HQ2 affecting values in the region, wherever that may be. A new warehouse? Not so much

[Jim S.]

Don't think it'll raise home prices by $200k but $50k sure.

I sure hope they choose Denver. Both for the property I'm in the process of buying & so I can work for em :)

[Richard Bull]

Hi @Jay Hinrichs can you please send me some information on the 23 homes that you are building in Troutdale? Thank you. 

[Jay Hinrichs]

@Richard Bull     5962 SE 33rd St Gresham Or 97080  you can look it up on realtor.com  RMLS  Redfin etc

we own all the houses on this street..

[Sam Josh]

Lets put ourselves in Amazon's shoes. Where would you go. My bet is on Boston (MIT, Harvard, Others), Philly or NJ, in that order.

[Sam Josh]

Best educated workforce - Boston, Philly, NJ.

Proximity to Seattle - Denver, Chicago, San Deigo, Vancouver.

Outside chance : LA (new tech hub of the world, NYC (evergreen)

Other contenders: Austin

Unfortunately they wont choose SF.  It will be very difficult for them to compete with Google, Apple, Facebook here.