Author Topic: Amazon and effect on housing prices  (Read 1404 times)

skuzuker28

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Amazon and effect on housing prices
« on: April 04, 2018, 05:08:38 PM »
We will be moving in a few weeks, and plan to sell our current primary residence.  However, our city has an Amazon fulfillment center opening later this year, and my wife thinks that this will put upward pressure on housing prices and we should hold on to our house for a few more months.  I disagree, but figured I'd seek the input of others before dismissing the idea.  First, the basic data on our house:

-1500 square feet, 3 bedroom 2 bath + office
-small lot
-2001 build
-Planned list price is around $300k

Towards the upper end of what could be considered a "starter home" for a middle class family in my area.  Indeed, this was our first home after deciding to move out our apartment.

Factors in favor of waiting:
-We can "afford" it from a cash flow perspective
-Our home is a convenient distance from the fulfillment center, which could make it more attractive to the people moving to work there
-1,000 jobs will be added via the fulfillment center, and many of those will be transfers from other Amazon facilities.  People will be looking for places to live, and inventory is already low.  Particularly for homes in our size/price level.

Dissuading factors:
-Most of the jobs are lower paying jobs.  More likely to be apartment renters than home buyers (at least in my mind).
-Money now is better than money later, and if we hold on to the house we lose the interest we pay.
-Maintaining two homes (even though we aren't moving too far away) would be annoying.
-Market timing rarely ever works, and I'd rather avoid it as a matter of principle.

Anybody have experience with areas that Amazon has build warehouses at?  Have home prices significantly increased?  Any other considerations?  Should I tell my wife no and start sleeping on the couch?

bwall

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Re: Amazon and effect on housing prices
« Reply #1 on: April 04, 2018, 05:18:49 PM »
Amazon pays these workers like crap. So, very little chance that they'll be home buyers any time in the next few years, unless they want to triple up and buy a house to split three ways.

skuzuker28

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Re: Amazon and effect on housing prices
« Reply #2 on: April 04, 2018, 05:47:06 PM »
Amazon pays these workers like crap. So, very little chance that they'll be home buyers any time in the next few years, unless they want to triple up and buy a house to split three ways.

That was my thinking as well.  Won't be buying a $300k house on $12-16/hr.  Or at least you shouldn't be.

Another Reader

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Re: Amazon and effect on housing prices
« Reply #3 on: April 04, 2018, 06:33:09 PM »
My experience with Amazon employees in Arizona is that they are not home buyers.  You may have a few older workers that are homeowners and need the job to supplement their pensions or savings to get by.  The rest are lower paid younger warehouse workers with limited skill sets.  They are not generally good money managers and even two $12.00 an hour jobs will not put them in a position to buy.  Rent, yes, especially doubling or tripling up.  Buy? No.

SwordGuy

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Re: Amazon and effect on housing prices
« Reply #4 on: April 04, 2018, 06:55:25 PM »
My mind boggles at the thought that a $300,000 house is a starter home.

I'm not on your case!   I just cannot fathom the amount of money people pay for houses.   

tralfamadorian

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Re: Amazon and effect on housing prices
« Reply #5 on: April 04, 2018, 06:56:23 PM »
Anybody have experience with areas that Amazon has build warehouses at?  Have home prices significantly increased?  Any other considerations?  Should I tell my wife no and start sleeping on the couch?

Agreed with everyone's comments. Fulfillment center workers are not paid well enough to buy houses. Maybe this well-written Atlantic article will help convince your wife:
https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/

skuzuker28

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Re: Amazon and effect on housing prices
« Reply #6 on: April 05, 2018, 11:27:48 AM »
My mind boggles at the thought that a $300,000 house is a starter home.

I'm not on your case!   I just cannot fathom the amount of money people pay for houses.

It is a little nuts.  We bought this home just 4 years ago for 193k AND the seller paid some closing costs.  Counting (and cashing in) our blessings on this home for sure.  I wouldn't pay that much for our home, but if others will who am I to argue?

skuzuker28

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Re: Amazon and effect on housing prices
« Reply #7 on: April 05, 2018, 11:28:40 AM »
Anybody have experience with areas that Amazon has build warehouses at?  Have home prices significantly increased?  Any other considerations?  Should I tell my wife no and start sleeping on the couch?

Agreed with everyone's comments. Fulfillment center workers are not paid well enough to buy houses. Maybe this well-written Atlantic article will help convince your wife:
https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/
Thanks!

Also, thanks to everyone else for confirming my thoughts.  This will make my wife feel a little better at least.

Aunt Petunia

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Re: Amazon and effect on housing prices
« Reply #8 on: April 05, 2018, 11:44:36 AM »
If you live in an area with seasons, you are going to want to get that house on the market asap. Demand will drop by late summer/fall and you don't want to maintain the house all winter. Trust me, I learned this the hard way. Even in a warm climate, people will probably not want to move after school starts.

skuzuker28

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Re: Amazon and effect on housing prices
« Reply #9 on: April 05, 2018, 11:52:10 AM »
If you live in an area with seasons, you are going to want to get that house on the market asap. Demand will drop by late summer/fall and you don't want to maintain the house all winter. Trust me, I learned this the hard way. Even in a warm climate, people will probably not want to move after school starts.

Thanks for the advice, original plan was to list on or before May 1st.  Just one more reason not to wait!

the_fixer

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Re: Amazon and effect on housing prices
« Reply #10 on: April 05, 2018, 12:02:50 PM »
The spring / summer are typically good times to sell due to families that have school aged children if you miss the busy time your house might sit longer and even require a price drop to sell it due to the limited pool of buyers.

If you were talking about a highly paid workforce you might see a bump but most workers are poorly paid so any impact will take a long time to reach your price point as it will be from a higher paid employee such as a manager or it would take a few cycles of move up buyers to make an impact.

If it is going to be a big gain you would likely already see signs as investors would be buying and people in the know relocating would already be looking.

Not a realtor or lawyer my opinion is worth nothing so take it for what it is worth.

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clarkfan1979

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Re: Amazon and effect on housing prices
« Reply #11 on: April 05, 2018, 01:57:00 PM »
When I was in high school Motorola built a huge complex of corporate offices very close to my parent's neighborhood, located in the suburbs of Chicago. Every house in the neighborhood was probably less than 3 miles from the entrance.

Nothing happened. The corporate offices were about 8-10 minutes from a major freeway. I'm guessing most employees commuted 30-45 minutes away in all directions.