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When Amazon announced its second headquarters (HQ2) in late 2018, online searches for homes in Long Island City, NY, and Crystal City, VA, skyrocketed by nearly 2,000% and 302%, respectively. In contrast, Nashville, TN—which received a major Amazon operations center—saw virtually no change in real estate search activity. This discrepancy highlights how different types of corporate investments and local market conditions uniquely influence real estate demand. While the initial search frenzy in HQ2 cities cooled, Nashville's already robust market, driven by years of sustained growth, absorbed the news without a short-term spike.
Nashville’s sustained popularity and relative affordability likely tempered any dramatic, immediate reaction. The city has been a top destination for out-of-state homebuyers since at least 2017. According to Redfin data from the last quarter of 2018, a consistent third of home searches for the Nashville metro area originated from users outside the region. Mel Priess, a Redfin market manager in Nashville, noted, “Over the last three or four years, I’ve had people flocking here from California, the East Coast and Chicago. Coming from those more expensive housing markets, buying a home in Nashville feels like a windfall.”
This existing demand is supported by strong economic fundamentals. Despite a 50% increase in the median home price over five years—from $190,000 in November 2013 to $285,000 in November 2018—Nashville remained more affordable than the national median of $300,000. Coupled with a low unemployment rate of 2.9% (compared to 3.7% nationally), no state income tax, and relatively low property taxes, the market was already thriving without Amazon's influence.
Why did Long Island City and Crystal City experience such dramatic spikes? The scale of Amazon's investment was a primary driver. HQ2 promised over 25,000 new jobs in each location, creating immediate speculation about future housing demand and price appreciation. This triggered a wave of searches from prospective buyers and investors hoping to get ahead of the market. However, this initial surge was short-lived. Agent feedback suggests that after the initial excitement, potential buyers confronted the reality of already high housing costs, leading to a levelling off of search activity in the following weeks.
What does Amazon's arrival mean for Nashville's long-term real estate market? While the short-term search data showed little change, local experts anticipate a significant long-term impact. The planned addition of over 5,000 jobs represents the largest single jobs announcement in Tennessee's history. Scott Mosley, a Redfin agent in Nashville, reported early signs of increased investor interest, stating, “I have investment clients from outside the state calling me and saying, ‘Hey, that’s great news about Amazon; I need to buy more properties.’” He predicts a "big wave" of demand once Amazon establishes a physical presence.
The reaction in the HQ2 markets also offers a cautionary tale. In Crystal City, Redfin agent Mara Gemond observed that while investor interest remained high, primary homebuyers began searching in surrounding neighborhoods like Ballston and Rosslyn, seeking more affordability. She also noted concerns about being priced out, with three-quarters of attendees at a recent home-buying class expressing anxiety about Amazon's impact on housing costs.
For homebuyers and investors, the key takeaway is to look beyond the initial headlines. A corporate announcement alone does not guarantee an immediate real estate boom.
Ultimately, Amazon's investment reinforces Nashville's status as a robust job center and is likely to contribute to sustained market strength, even without a dramatic short-term spike in online searches.
