Probably one of the biggest news stories to drop in the business world last year was that of Amazon, and its hunt for a new co-headquarters – dubbed HQ2. Just a few weeks into the 2018 New Year, the online retail giant announced its list of top 20 city finalists.
So the question many of us are asking ourselves is this: How does the arrival of Amazon – a leader in the e-commerce space estimated to bring 50,000 new jobs – impact the rental housing market of the chosen city?
Our team of CoStar researchers applied a new forecasting model that predicts how Amazon's HQ2 would affect the demand for apartments, rent growth and rental property values. This insight is based on historical apartment demand generated by employment gains in the markets under consideration.
“The Amazon effect is in direct proportion to the size of the markets,” says John Affleck, CoStar Group’s Director of Analytics. “The larger markets – and markets with a significant existing pipeline of new construction – could absorb the tech behemoth’s arrival fairly easily. But smaller markets like Raleigh and Nashville, and even Austin, could see a pretty significant effect.”