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The 'Amazon Effect' on Residential Pricing

For many of the cities on the shortlist released last week, "adding a job creator like Amazon would add further housing demand and upward pressure to housing costs,” says Frank Nothaft at CoreLogic.

By Paul Bubny | Updated on January 22, 2018

Skyline of Nashville Nashville’s housing costs would increase on both the for-sale and rental sides if Amazon chose the city for its HQ2 project.

IRVINE, CA—As Amazon has whittled down more than 200 contenders for its second headquarters campus to a shortlist of 20 cities, the issue has arisen once more of what the e-commerce behemoth’s presence in a given metro area would do to that market’s housing costs. “No matter which city is chosen, the influx of 50,000 high-paid Amazon workers and 66,250 supplementary workers over a 10-year period will put pressure on local housing markets, driving up rent and home prices,” says Apartment List.

Although the impact would vary among individual metro areas, analyses by CoreLogic and Apartment List point to two general conclusions. Namely, markets where for-sale housing prices are already overheated would feel the Amazon effect most acutely, while on the rental side, the smaller markets are especially susceptible.

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