CoreLogic: Amazon’s Top Cities For Second HQ Are Mostly ‘Hot’ Housing Markets

There’s no doubt that whichever city ends up hosting Amazon’s second headquarters will benefit from increased home values.

But a recent analysis from CoreLogic shows that the degree to which any given market benefits depends largely on the level of home price increase already seen in that given market.

One can probably expect smaller markets to benefit to a greater degree than larger ones. But as the analysis shows, some markets probably stand to benefit more than others, in terms of home prices, simply because they are already considered “overvalued.”

Of the U.S. “finalist” markets on Amazon’s list, Newark, N.J., has seen the lowest home price appreciation in the past year, at 2.6%. Its home values are considered “normal” according to CoreLogic’s home price index.

Compare that with Nashville, Tenn. – which is also on Amazon’s list of possible locations. It saw 8.17% home price appreciation in 2017. Housing stock there is considered “overvalued,” according to the HPI.

In fact, all 20 “finalist” markets (no CoreLogic data for Toronto) have seen home prices increase, on average, during the past year.

Of course, Amazon officials probably won’t be selecting a host city based purely on the impact it will have on the local housing market. The quality of the local labor force and transportation infrastructure are also likely to be key considerations.

“As leaders at Amazon continue to narrow their location choices, the housing situation is an important consideration,” says Frank Nothaft, chief economist for CoreLogic. “Some of the contenders have home price increases that are trending higher than the national average of six percent. Denver and Nashville lead the pack, with home price increases at more than eight percent, but CoreLogic research indicates that these markets are overvalued right now. Adding a job creator like Amazon would add further housing demand and upward pressure to housing costs.”

The chart below, courtesy of CoreLogic, shows the year-over-year increase in the average home price in each of Amazon’s “top 20” markets:

City or Region

CoreLogic HPI YOY

CoreLogic MCI

Atlanta, GA6.26%Normal
Austin, TX4.82%Overvalued
Boston, MA6.66%Normal
Chicago, IL3.65%Normal
Columbus, OH7.44%Normal
Dallas, TX6.39%Overvalued
Denver, CO8.12%Overvalued
Indianapolis, IN5.47%Undervalued
Los Angeles, CA7.46%Overvalued
Miami, FL3.72%Overvalued
Montgomery County, MD2.78%Overvalued
Nashville, TN8.17%Overvalued
Newark, NJ2.60%Normal
New York City, NY3.32%Overvalued
Northern Virginia, VA3.68%Overvalued
Philadelphia, PA6.26%Normal
Pittsburgh, PA2.11%Undervalued
Raleigh, NC4.81%Normal
Toronto, ON*N/AN/A
Washington D.C.3.68%Overvalued

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