Effects of Amazon's HQ2 Exit on New Yorkers

Amazon recently announced that it will not build a new second headquarters in New York after all. The jobs are expected to move to HQ2's new and only home in Arlington County, Va., and in the new Nashville operations center.

According to Zillow director of economic research Aaron Terrazas, the impact on Long Island City may be felt most by those "who dove into real estate following Amazon’s HQ2 announcement in November." The median list price for condos was flat in August 2018, but jumped by nearly 10 percent in November, and 12 percent higher in December 2018. Annual growth for median condo rental prices per square foot tripled in the fourth quarter.

For investors and hopeful locals who bought Long Island City real estate after Amazon announced it was coming there, the news is disheartening. Indeed, they are likely to see a near-term dip, but the longer-term outlook for New York City real estate is still good. New York continues to be an attractive area for jobs, and companies besides Amazon are still growing there. The city’s persistently sky-high rents are a testament to the Big Apple’s enduring popularity. But the experience also demonstrates how important it is to consider potential housing needs in any local economic development plans.

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