Predicting Prices: Expect Gains for HQ2 Runners-Up
By Suzanne De Vita
The Amazon contenders are in for a hot 2019, according to expert housing predictions.
Compared to growth on a national scale, cities in the HQ2 hunt—including Washington, D.C., one of the winners—are forecasted to have higher home values in the upcoming year, Zillow's latest Home Price Expectations Survey shows. More than 100 economists and experts participated in the survey.
According to the findings of the survey, Atlanta, Dallas, D.C., and Denver—all finalists in the HQ2 race—are expected to outperform the overall price trend for the U.S. Appreciation for the country was pegged at 3.8 percent for the year, and 3.4 percent over the next five. In October, Atlanta home prices were up 7.7 percent year-over-year, according to the Zillow Home Value Index (ZHVI); in Dallas, they were up 10.9 percent year-over-year; in D.C., they were up 3.5 percent year-over-year; and in Denver, they were up 6.2 percent year-over-year.
Not every finalist is in for growth, however. Chicago was chosen as the market most likely to underperform relative to the U.S., according to the findings of the survey. Baltimore—adjacent to Montgomery County, also on Amazon's list—was another market most likely to underperform, based on the experts' votes.
"Amazon ultimately selected two of the country's most prominent hubs of commerce for their second and third headquarters, but many of the candidate cities that were not ultimately selected could see spillover gains in 2019," says Aaron Terrazas, senior economist at Zillow. "The groundwork that they undertook to entice Amazon will also be attractive for smaller employers increasingly strained by high and rising costs in traditional tech hubs.
"As mortgage rates rise, communities that can offer affordable workforce housing and reasonable commutes are likely to be long-term winners and should expect their housing markets to outperform the nation," Terrazas says.
"Having landed their prize, the government officials in the HQ2 markets now must be prepared to manage infrastructure challenges and address quality-of-life concerns," says Terry Loebs, founder of Pulsenomics, which conducted the survey with Zillow. "We'll see how they do."
For more information, please visit www.zillow.com.