What Amazon Abandoning New York HQ2 Plans Could Mean For Nashville

Dated: 02/14/2019

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by TJ Anderson

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There’s sure been a lot of talk about Amazon over the past few weeks… But let’s focus on what might affect us here in Nashville — specifically, the Nashville real estate market.

On Thursday, news broke that the online sales behemoth would not go forward as planned with their much-publicized second headquarters in Long Island City, New York, one of two new “Amazon HQ2” spots announced in November.

The company said it didn’t intend to reopen its location search, but would, however, continue plans to expand and build in Northern Virginia, and here in Nashville.

Northern Virginia was the other “HQ2” pick from Amazon, while Nashville’s plans, as announced, were a little more streamlined: an "Operations Center of Excellence,” focused on handling "customer fulfillment, customer service, transportation, and supply chain.”

What does this New York news mean for Amazon’s Nashville plans?

With New York now off the table, and Nashville still on it, does that mean Nashville is going to play a bigger role in Amazon’s plans? Will the Nashville center get expanded or enlarged?

Hey, if The New York Times doesn’t know more, I certainly don’t yet — and neither do the rest of us. But even if the Nashville Amazon "Operations Center of Excellence” goes exactly as initially planned (two 20-story office towers in the Nashville Yards development, north of The Gulch), we can probably expect some degree of “Amazon effect” in the Nashville real estate market as it comes online, which could be as soon as 2021.

What the ‘Amazon effect’ predictions look like:

There are a lot of moving pieces that’ll come together into what, exactly, that “Amazon effect” might look like in Nashville real estate (and in Northern Virginia, too). But predictions about real estate effects were getting thrown about as soon as Amazon announced its first round of intentions. Amazon’s HQ1, after all, has been connected to steadily and swiftly rising housing prices and rents in Seattle.

In December, the Mortgage Bankers Association had this to say in a newsletter:

“Right now, every homeowner in northern Virginia thinks they're sitting in a home worth at least $1 million, thanks to Amazon. They might not be that far off.”

That sense was based on predictions from Zillow and Pro Teck Value Solutions, who saw evidence of Amazon cities “already enjoying a price bump as a result of Amazon's decision to build new headquarters there.”

NBC found that on the ground in Virginia, too, reporting that local Realtors were seeing once-uncertain buyers now feeling a strong push to pounce.

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"They woke up this morning, saw the Amazon announcement and they decided they wanted to move forward with a contract,” Realtor Jen Walker told the network. “They said, ‘We’re going to get priced out if we don’t do this now.’”  

Marketwatch talked about how New York and Northern Virginia, in particular, might be suited for a more measured real-estate effect than Seattle, since, according to Zillow chief economist Aaron Terrazas, those areas “have historically been quicker to build upward and outward to meet the housing needs of newcomers.” 

Nashville, on the other hand, has been slowly working up to that response — we had a long, much-talked-about struggle with inadequate housing supply as our population grew, and have only been seeing more housing inventory relief in Nashville over the past handful of months.

Whether our building pace will be quick enough to keep up with a potential Amazon boom remains to be seen. But according to Greater Nashville REALTORS president Andrew Terrell, “Housing Inventory continues to show a steady and consistent gain which is critical to a strong and healthy market.”

Changing the real estate game?

"Amazon would have been a game changer regardless of what city they chose," Pro Teck DEP Tom O'Grady said, discussing the “Amazon effect” on local real estate. 

So is Amazon going to change the game here in Nashville? And does any of this mean you should change your plans, if you were thinking about buying or selling a home in Nashville?

Ultimately, “Who knows?” is the most concrete answer any of us can reasonably expect. But the real estate prognosticators sure seem to be bullish, and that's at least worth thinking and talking about, if not taking as gospel.

Looking to talk a little more about Nashville real estate, and how market conditions might fit into your homebuying or home-selling plans? I’m always happy to help. Call or email TJ Anderson Homes, and tell me what you’re thinking about.

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TJ Anderson

TJ Anderson is a Nashville Realtor with Benchmark Realty who's helped countless clients both buy a home and sell a home in Nashville, Tennessee. He blogs about Nashville regularly, from Nashville-area....

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