Experts expect Amazon to choose either Northern Virginia or Atlanta for its new headquarters, according to the 2018 Zillow Home Price Expectations Surveyⁱ. Austin and Denver were also commonly cited by experts as strong contenders.  

After receiving 238 bids, Amazon announced in January that it narrowed its search for a second headquarters ("HQ2") to 20 cities. In and around the city that Amazon chooses, HQ2 is widely expected to have a profound impact on housing and the local economy.

Since Amazon announced last October that it would build a second headquarters somewhere in North America, it's become a popular game to guess which city they will choose based on its criteria. Zillow asked over 100 housing and economics experts to take a guess through their unique lens. Amazon is expected to announce its choice sometime in 2018.

Among the 20 cities on Amazon's list, Atlanta has the fourth lowest home values and rents, making it an attractive option for Amazon, which is expected to hire as many as 50,000ⁱⁱ people to come work at the new headquarters. Northern Virginia, part of the Washington D.C. metro, is among the more expensive housing markets on the top 20 list, but would put Amazon at the doorstep of the nation's top policymakers.

As Amazon has grown from a startup bookstore to one of the country's most prominent retailers, Seattle home values, where Amazon is based, have almost doubled and rents have increased by half. However, Seattle's growing pains can't all be blamed on Amazon -- the jobs boom in and around Amazon's current headquarters explains less than one-fifth of the region's rising rent. The company's growth has created a business environment that has attracted many other employers to the Seattle region.

"As the experience of Seattle suggests, Amazon will not only directly bring thousands of high-paying jobs to the chosen city, but also has the potential to transform the regional economy," said Zillow Senior Economist Aaron Terrazas. "The local jobs boom that Amazon's HQ2 promises will spur demand for the full spectrum of housing types – ranging from urban apartments to suburban single-family homes. Atlanta has the benefit of being one of the most affordable markets in the country, and is undergoing an urban renaissance with new public infrastructure providing attractive opportunities for employers seeking to lure young urbanites. Northern Virginia has its benefits as well, as it's close to a highly educated workforce and a well-developed public transit infrastructure in the D.C. area."

In addition to affordability, experts cited land availability, talent and business friendly tax codes as a few reasons why they believe Amazon will choose Atlanta as its second headquarters. A growing tech workforce and easy access to Washington D.C. policymakers were noted by respondents as reasons why Northern Virginia may be Amazon's chosen second home.

Many cities that bid to become Amazon's second headquarters offered tax breaks and other benefits to the company, which will likely be considered alongside reasons cited by experts.

The quarterly survey, sponsored by Zillow and conducted by Pulsenomics LLC, asked more than 100 housing economists and professors about their overall expectations for the U.S. housing market, as well as what city they think is most likely and least likely to be chosen as Amazon's second headquartersⁱⁱⁱ.

"The potential economic benefits of hosting Amazon HQ2 are tantalizing, and will tempt the 20 municipalities still in the hunt to dangle significant tax incentives to get a deal done," said Terry Loebs, founder of Pulsenomics. "These cities should be prepared not only to justify their financial inducements, but to carefully weigh the social risks and costs that could accompany their HQ2 commitment. The mix and degree of these potential risks, such as diminished affordable housing stock, more congested roadways, and greater income inequality, vary considerably across the 20 markets."

Among the 85 experts who responded, 12 said Amazon is most likely to choose Atlanta, 12 selected Northern Virginia, 11 selected Austin, nine selected Raleigh, North Carolina and six selected Denver.

Los Angeles, Newark, New York and Miami were the cities respondents said were the least likely to be chosen by Amazon. Reasons include high housing costs, traffic and an unfavorable tax environment. Los Angeles is one of the most expensive housing markets in the country, with a median home value of $636,500 and a median rent payment of $2,738, almost twice as expensive as the national median. Residents in the Los Angeles metro can expect to put 41 percent of their monthly income toward a mortgage payment and almost half toward rent.