Hello friends, and welcome to the February Housing Report for the DC Metro area. From new Trump policies affecting the federal workforce to DOGE cutting federal lease renewals and reductions in federal agencies, there’s a lot happening that could impact buyers, sellers, and investors.
We will dive into all that but before we do, if you’re looking to buy or sell a home, we invite you to join us for our upcoming real estate brunch, where we’ll go even deeper into all these topics and help you develop a strategy for getting the best results when buying or selling in this market. More on that at the end of the video. Now, let’s start with what’s actually happening in the local real estate market.
January is always an interesting month because we’re coming out of the holidays and there is less activity. Most families prefer to wait until spring to list their property so they can close in the summer. That said, we did see the typical increase in new inventory this January, which aligns with historical trends.
With those new listings hitting the market, the total number of homes for sale increased slightly, however, inventory remains very low throughout the DC Metro area.
At the same time, the number of closed sales last month was very low—which is also normal for this time of year. Historically, January sees the fewest closings each year, and we expect activity to pick up significantly as we move into the spring market.
Average sales prices dipped slightly in January. This is a seasonal trend, so we don’t expect it to indicate a long-term price decline.
All in all, January was consistent with seasonal trends in the DC area. So now let’s talk about a few items that are on people’s minds locally.
- Impact of Federal Workforce Policies on D.C. Real Estate
D.C. home buyers and sellers are experiencing a lot of uncertainty due to new federal workplace policies. Return-to-work mandates are forcing some federal employees—who haven’t worked in person for 15 years—to reconsider their housing situation. This will likely increase demand for local housing, as many will need to relocate closer to their offices.
We are kind of seeing this now with prices. You can see here that the average homeowner’s equity throughout the DMV has increased in the past year, with Virginia leading the way with $22K per homeowner. While out west we are seeing a pullback in prices.
So with people being called back to work you would think we would need more space, however, in an unexpected twist, Elon Musk’s Department of Government Efficiency (DOGE) has announced the termination of 22 federal leases in Washington, D.C. This move is aimed at cutting costs and reducing unused office space. While it makes sense, it also raises questions about where returning workers will actually sit and work. This uncertainty is leading some federal workers to consider that offer for early retirement.
Most of the time, when people feel uncertain, they tend to hold off on making major real estate decisions. This may be a reason the number of transactions is low, however, the real reason is likely the fact that they are locked into historically low mortgage rates and don’t want to trade them for today’s higher rates.
- Luxury Market Sees a Surge
While parts of the market are seeing hesitation, D.C.’s luxury market is thriving. There have been several major transactions recently with an increase in demand from billionaires looking to have a foothold in Washington.
This high-end buying trend is something we’re seeing firsthand, with more luxury buyers entering the market. If you own a high-end property and are considering selling, now might be an excellent time.
So what does all of this mean for you?
If you are a buyer,
✔ Now may be a good time to take advantage of slightly lower prices & less competition – Winter months typically offer better deals, and fewer buyers in the market means less competition.
✔ Get pre-approved now – Interest rates remain a challenge, but buying before the spring rush gives you better negotiation power.
✔ While buying feels hard, remember that you are getting the benefit of leverage through the loan. You borrow 80% but get the appreciation on the whole value of the home.
While prices can go down, over time, they have only gone up to date. Take a look at homeowner equity since 1991. Over 30 years, the house will be paid off.
If you are a seller
✔ High demand + low inventory = a seller’s market – With inventory remaining low, homes that are priced correctly are selling quickly.
✔ If you own a luxury home, now is the time – The high-end market is hot, and we’re seeing strong demand from high-net-worth buyers.
✔ Prepare now for the spring market – If you’re thinking of selling in 2025, now is the time to get your home ready and plan your next move. Give us a call and we will schedule a free consultation to help you position your home to sell for the highest price.
If you are an investor…
✔ Watch the rental market closely – The DC suburbs remain a strong rental market, especially as more federal employees move back to the area.
✔ Capitalize on uncertainty – When people are unsure about buying or selling, investors who move strategically can find the best deals.
To wrap up—whether you’re buying, selling, or investing, this changing market presents opportunities. If you want to discuss your next move, we invite you to our upcoming real estate brunch, where we’ll dive deeper into these trends and strategies. Register at the link on the screen and enjoy a delicious brunch while we share more insights on the best strategies for finding the right home, getting the best value, and selling for the highest price. Space is limited so register soon.
That’s it for this month. We are busy helping our clients and would love to help you as well. If you are looking to buy or sell a home, stay updated by subscribing to our monthly housing report or text us to set up a 10 minute phone call to discuss your real estate goals. We would be honored to serve you.
