Amazon HQ2's Impact on Seattle Housing: A Data-Driven Forecast for Buyers and Sellers

The anticipated opening of Amazon's second headquarters (HQ2) is projected to slow the rapid pace of Seattle's housing market, shifting conditions toward a more balanced or even buyer-favorable environment. Based on an analysis of hiring trends and real estate data, this shift is expected to manifest through increased inventory, slower price growth, and a decline from the frenzied, multiple-offer scenarios that have characterized the city's recent real estate landscape.

What is the Historical Connection Between Amazon and Seattle's Housing Market?

Over the past decade, Amazon's expansion in Seattle has been a primary driver of the city's real estate boom. The company's local workforce grew from approximately 4,000 employees to over 45,000. During this same period, the median home price (the middle point of all home sale prices) in the city surged from $420,000 to $720,000, according to the Northwest MLS. This represents a 71% increase, nearly double the national average of 24% measured by the S&P Case-Shiller Home Price Index. The correlation is clear: massive job growth, particularly high-paying tech jobs with an average salary exceeding $110,000, created intense demand for housing, significantly outpacing supply.

How Could HQ2 Directly Impact Seattle's Real Estate Inventory?

The key metric for understanding market balance is months of supply, calculated by dividing the number of homes for sale at month's end by the number of homes sold that month. A seller's market typically has 1-2 months of supply, while a balanced or buyer's market has 5-6 months. Amazon's past growth averaged 330 new employees per month—enough to dramatically influence this delicate balance. HQ2's impact will work in two ways:

1. Increased Listings: Some current Amazon employees may relocate to HQ2, potentially listing their Seattle homes for sale.
2. Decreased Demand: Future hiring in Seattle is expected to slow significantly as Amazon focuses recruitment efforts on HQ2.

Even a modest scenario, where 5% of the Seattle workforce relocates over two years, could add approximately 94 new listings per month. Combined with reduced demand from slower hiring, this influx of inventory could push the market toward a buyer's advantage by increasing the months of supply.

What Are the Realistic Scenarios for Seattle's Market?

Based on our experience assessment, a full-scale market collapse is highly unlikely. However, several plausible scenarios could unfold, depending on the scale of Amazon's transition.

• A Significant Shift Scenario: If hiring in Seattle slows to a trickle and a small percentage of employees leave, the market could see a noticeable increase in inventory. This would likely result in more negotiating power for buyers, fewer bidding wars, and a deceleration in the rapid price appreciation seen in recent years.
• A Milder Adjustment Scenario: A more gradual transition would still alter the market's trajectory. The era of extreme seller leverage would end, leading to a more normalized market with balanced conditions between buyers and sellers.

The following table illustrates how different levels of employee relocation could affect monthly listings, using Seattle's recent average of 1,100 new listings per month as a baseline.

What Does This Mean for Seattle Home Buyers and Sellers?

For those navigating the Seattle real estate market, understanding these potential shifts is crucial for making informed decisions.

• For Buyers: The forecast suggests increased opportunities. A rise in inventory means more choices and less pressure to waive contingencies or offer significantly over the asking price. Based on our experience assessment, buyers may find a less competitive environment in the coming years.
• For Sellers: The strategy must adapt. Pricing a home correctly from the start and ensuring it is in top condition will become more critical as the market cools. Sellers should prepare for longer marketing times and a potential return of home sale contingencies, such as financing and inspection clauses.

The most significant takeaway is that the Seattle housing market is entering a period of rebalancing. While Amazon's growth was a dominant force in the last decade, HQ2's creation introduces a new variable. The local market's health will increasingly depend on hiring by other technology firms and the broader regional economy.

The Seattle market is not headed for a crash, but rather a predictable and necessary cooldown from its recent peak intensity. Buyers should prepare for more favorable conditions, while sellers must adjust their expectations toward a more normalized transaction process.