By Josh Teti, Princeton Mortgage Wholesale
Photo by Piotr Cichosz on Unsplash
When a company announces it’s opening a new headquarters, it rarely gets as much attention and anticipation that the eCommerce giant Amazon has gotten. Last September, Amazon invited cities to submit bids to be the location for its second headquarters. A total of 238 bids were submitted and some were pretty interesting too – Tucson, AZ sent a 21-foot cactus to Amazon’s current HQ in Seattle and Stonecrest, GA offered to rename its city to Amazon, GA. Since then, news has been quiet until last week when that list was cut to 20 (shout out Pittsburgh) which means we’re one step closer to finding out what lucky city gets the nod……but hold that thought, is that city really going to be lucky?
On the surface, pumping in $5 billion and creating 50,000 jobs seems like a good thing, but let’s take a deeper dive into the details. Placing 50,000 new residents into a city could spur issues such as increased traffic (Seattle residents spent an average of 55 hours in traffic in 2016), prolonged construction (without adequate contractors and strict zoning laws, construction delays are prevalent), and soaring housing prices (simple supply & demand). From 2005-2015, Seattle’s median rent increased 28%, and in 2017 the median home price hit $730,000 (up 17% from 2016). This created a “prosperity bomb” which pushed out many of Seattle’s long-time residents and shifted its economic make-up by creating its first million-dollar neighborhood, which poses the question – will the next city be ready for this? But it hasn’t been all bad…. Amazon started efforts to house hundreds of homeless people in one of its Seattle buildings and has donated millions of dollars to local colleges and universities. Nevertheless, one thing is evident with the impact of Amazon’s HQ2 – everything will go up.
My thoughts if you end up being a resident of the chosen city – If you’re thinking of buying: pull the trigger. Many lenders offer products to help buyers secure financing with competitive rates and minimal down payment requirements. If you currently own: expect a nice increase in value and explore tapping into your growing home equity for attractive refinance options. However, your costs (such as property taxes) may increase once your property’s assessed value is adjusted. If you rent: expect a rent hike, but you may have options…. for instance, try negotiating a longer lease term with your landlord who would generally accept a lower price for a longer commitment.
So, the Super Bowl is set. Tom Brady and New England are back again and will be taking on the surprising Philadelphia Eagles who were all but counted out once their starting QB was injured. My beloved Pittsburgh Steelers will be watching from their couches this year which puts someone like myself in a weird position – do I root for the highly disliked Patriots or the cross-state rival Eagles? One thing I do know is that I’ll probably be paying more attention to the commercials and the halftime show from my boy Justin Timberlake.
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.