MARKET UPDATE: Washington, D.C. Real Estate: What’s Happening Now?

INTRODUCTION

Hello and welcome back to my blog. If you’re keeping an eye on the real estate market in Washington, D.C., it's been a bit of a ride. Prices are shifting, inventory is up, and some big changes are on the horizon. Whether you're looking to buy, sell, or just stay informed, here's what you need to know about what’s happening right now in the nation's capital.




Prices Are Moving (But in Different Directions)

Home prices are giving mixed signals. The median sale price is around $650,000, which is up about 11% from last year. But depending on who you ask, some sources are also reporting a slight dip in average values. What does that mean? Well, if you’re selling, it’s still a solid market—but buyers are starting to get a bit more power.

More Homes Are Available (and Sitting Longer)

If you’ve been house hunting, you might have noticed that there are more homes to choose from. Inventory has jumped 46.5% year-over-year, which is great news for buyers. Sellers, on the other hand, are seeing their homes sit on the market longer—about 41 days on average before they go under contract, a sign that the market is cooling down a bit.

What’s Driving These Changes?

A few major factors are shaking things up not the least of which has to do with the new administration:
  • Government Budget Cuts: The constant drumbeat of federal layoffs is at a bare minimum creating negative sentiment at a time when higher mortgage rates are persisting. The Department of Government Efficiency (DOGE), led by, dare I even mention his name, Elon Musk, has proposed significant budget cuts, potentially leading to mass layoffs within the federal workforce, some of which have begun. As noted recently by the publication "Business Insider" cities with substantial government employment, including our area, of course, could experience further declines in home prices due to decreased demand. 
  • Construction Costs Are Up: Tariffs on materials like steel and aluminum are making new builds more expensive. That could slow down new construction, which might tighten inventory again in the long run.
  • Political Changes: With Trump back in office, things are shifting in D.C. Some policies (like cutting back on federal office space) could affect the local economy—and by extension, the housing market.
Trends to Watch

Even with all this change, some interesting trends are popping up:
  • Luxury Homes Are Booming: Wealthy buyers are still pouring money into D.C.’s high-end real estate. A $25 million mansion just sold, showing that the luxury market is thriving.
  • The “Gray House” Effect: If you’re seeing more houses painted gray in your neighborhood, that’s not random. It’s actually a sign of gentrification—often bringing higher home values with it.
  • Office Spaces Are Shrinking: The federal government is cutting back on office leases, which could shake up the commercial real estate market. More empty offices could mean lower demand for housing near them.
Bottom Line

D.C.’s real estate market is changing, but it’s not crashing in spite of all the uncertainty out there. If you’re buying, there are more options and maybe even a little more negotiating power. If you’re selling, you might need to price competitively or be ready to wait a little longer for the right buyer.

For sure it’s a challenging time to watch the market and or predict the future but as always when it comes to real estate or any large purchases the most important thing to consider other than budget is your time horizon and your needs. The average person stays in their home for seven years. Over time the Washington DC metro area has proven itself to be resilient and a great place to invest. Let's hope it continues. 

Meanwhile, as always I am here to help you navigate your way through the options, whether you are a seller or a buyer. 

Thank you for reading and feel free to comment or like the post...


Comments

Post a Comment

Popular posts from this blog

A tech titan Just Bought a $23 Million D.C. Mansion—And He’s Not Alone

Image
INTRODUCTION After spending 12 glorious and peaceful days in the Alps, some of which I spent skiing, I came back to this real estate news... and given the tumult that has been caused by the Trump administration, I thought it would rather timely to address the subject. If any of you have had a good amount of exposure to life in Europe you most likely understand it to be a place that truly values public services from transportation to health care to name a couple, particularly in Switzerland, a country that has found the magic formula to efficiently sustain it's infrastructure while keeping the broad populous happy.  In Lausanne, for example tourists who overnight in hotels are granted free access to public transportation, much of which is electric. On a minor and important point airports and train stations do not charge for luggage carts like we do in the richest country in the world. There was no litter, or an elevator/escalator that didn't work and there was no evidence ...
Read more

Thinking about remodeling your home? Here's my perspective as a Washington DC metro area realtor

Image
INTRODUCTION Hello and welcome to my latest blog. If you’re thinking about remodeling your home in the Washington, D.C. metro area, you might wonder which upgrades will add the most value. Today, I'm taking a look at the projects that can make a big difference when it’s time to sell and or to boost the enjoyment of your home if you are not quite ready to sell, or perhaps you might be thinking about renting it out for a period as is the case with a client I am currently working with. On a timely note, if you don't have the time or the inclination to run to Home Depot, for instance, Doordash and Uber just signed deals to link up with the home goods store.  Before I proceed, the return on investment in real estate terms is a complex calculation. On the one hand data might show that a remodel is not worth the time and the effort and on the other there are times when one needs to make changes in order to attract a large or larger pool of buyers which is critical in a market such as ...
Read more

GREEN ENERGY SERIES Part 2 of 3: Residential Real Estate: The Financial Upside of Switching to Green Energy

Image
Here are some of the key advantages along with a list of considerations for those who might want to wait: 1.  Lower Utility Bills Renewable energy sources  such as solar and wind can reduce or even eliminate monthly electricity bills. Many homes with solar panels generate enough energy to meet their needs and even sell excess energy back to the grid which is referred to as net metering.  2.  Tax Credits and Incentives Governments often provide  tax credits, rebates, and subsidies  for installing renewable energy systems, like solar panels, wind turbines, or geothermal systems. These incentives can significantly reduce the upfront costs of installation which for some is the initial barrier to entry.  3.  Increased Home Value Homes equipped with renewable energy systems often have higher property values because of their energy savings and sustainability appeal. For instance, I sold a rowhouse in the neighborhood of Bloomingdale for top dollar/above ...
Read more