Earlier this year, the government laid off thousands of federal employees. The mass layoffs have impacted both how and where residents of the D.C. region are living.
One point of stress for many was that the worry that a large-scale disruption to the local workforce would trigger a regional exodus, causing home values to plummet. But with the year’s busiest months for home sales behind us – it’s become clear that hasn’t happened.
Bright MLS Chief Economist Lisa Sturtevant says that approximately 14% of the regional workforce is employed by the federal government, so the economic well-being of the region is tied to those jobs. With home sales below where they were at this point in 2024, Sturtevant cautions against giving too much credit to the federal layoffs.
“Sales are lower than last year in other markets, it’s not just Washington, D.C. Buyers have been pulling back across the United States, because of higher mortgage rates and affordability challenges.”
Despite sales dropping and mortgage rates staying stubbornly high – though they’re beginning to fall – the median sale price of a home is 2% higher compared to last August. Sturtevant says that high end home sales are buoying the median price despite the drop in total sales.
“We have more higher end buyers in the market right now than we did last year, while more moderate income buyers are sitting out,” she says.
Locally, Montgomery County, and Prince George’s County, Maryland have seen softening in their housing markets. Sturtevant also flagged a “sharp” drop of home sales in the last two weeks of August in the District, “related to the federal interventions in the city itself.”
Sturtevant points to resilience in suburban Virginia as a regional highlight, including in Fairfax County and Loudoun County.
“And that could partially be due to the fact that relative to Montgomery County (Md.), Loudoun and Fairfax have a larger share of private sector employment, and less dependency on the federal government.”
Sturtevant also calls out the condominium market as a bright spot of affordability at a relatively pricey time.
“There are twice as many condos on the market as there were in 2019. And that means that buyers in that part of the market have an advantage, and can negotiate, because sellers are in this market where there are lots of listings.”
The post The D.C. region’s real estate market didn’t take a dive. What happened instead? appeared first on WAMU.
Published Date : 2025-09-11 19:17:00
Source : wamu.org
