DC house prices plunge amid DOGE turmoil

Home prices in Washington D.C. have fallen by 11 percent since the beginning of the year, according to a new analysis by real estate trading platform Parcl Labs tracking the impact of the Department of Government Efficiency’s (DOGE) actions on the city’s housing market.

While housing experts are cautious about tracing back the current weakness in the Washington, D.C, market to the mass layoffs ordered by DOGE, there’s no doubt that changes to government spending and hiring policies could have an outsize impact on the area and their impact would become more evident in the spring selling season.

Why It Matters

DOGE’s efforts to shrink the size of the federal government, which Donald Trump has described as “bloated” and filled with “people that are unnecessary,” has led to the firings of thousands of federal workers. Tens of thousands of others have taken the Trump administration’s offer to resign now and receive six months of wages, rather than stay in a role they don’t know how long they will keep.

Mass resignations and layoffs have the potential to shake up the Washington D.C. housing market, as federal workers in the city are uncertain about their future—whether that involves going back to the office or no longer having a workplace.

What to Know

As of February 18, the latest data made available by Parcl Labs, the average price per square foot of a home in Washington D.C. was $474.36, lower than the value reported on the same day last year ($504.05) and in 2023 ($497.44). Compared to a month before, a few days ahead of Trump’s inauguration, the price per square foot of a home in Washington, D.C., was down by 7.2 percent.

While the number of new listings was also down 13.96 percent on February 18 compared to a month earlier and 18.57 percent from a year before, the number of active listings with a price cut was on the rise, the real estate company reported.

Of all the active listings in the city’s market, 23.3 percent had their price slashed by sellers, up 6.46 percent from a week earlier and a staggering 40.31 percent compared to a month earlier.

While the price drop in Washington D.C. stands out from seasonal patterns, Parcl Labs said, the number of new listings and price cuts “appear to be in range of seasonal norms and patterns.”

At the metro level, prices in D.C. were also down, while the numbers of new listings and those with price cuts were both up. In the Washington metro, the average price per square foot was down by 1.11 percent compared to a month earlier, at $293.94, while it was higher than a year ago by 4.17 percent.

The number of new listings, at 1,357 this week, was up 1.42 percent compared to a week earlier but down by 3.35 percent from a month before. A total of 18 percent of these listings had a price reduction, up by 8.23 percent from a week earlier and by 44.41 compared to a month ago.

What Is Causing The Current Weakness in D.C.?

While John Burns Research and Consulting recently published a study warning of the impact of DOGE’s cuts on housing markets with high concentrations of federal workers, Parcl Labs says that “D.C. housing weakness—particularly at the city level—predates DOGE.”

According to the company, “the market now sits 21.2 percent below its peak values and is now below March 2020 levels. D.C. city is down 6 percent year-over-year.” This longer-term weakness, Parcl Labs said, “sets an important backdrop for understanding today’s market dynamics, as DOGE-driven federal job cuts and broader budget reductions threaten to add new pressure to the local D.C. economy.”

A recent update on the Washington D.C. housing market by Realtor.com found that although inventory is rising and prices are cooling in the area, “those trends predate the election, and are largely in line with national trends.” According to the company, the impact of federal layoffs on the city’s market could easily be overstated: government employees represent only about 9 percent of the D.C. regional workforce.

What People Are Saying

John Burns Research and Consulting wrote in a recent report: “The DC housing market is already showing signs of hesitancy. Consumers and investors are adopting a wait-and-see approach before proceeding with purchases. New home closings declined by 16 percent in the year leading up to December 2024, according to JBREC’s latest DC market analysis, and the resale market appears stagnant.”

Real estate analyst Lance Lambert wrote on X: “I’ve already received a few messages and DMs from local agents about the cooling effect that DOGE and federal spending cuts are having on D.C.’s housing market Anecdotal noise? or material impact? Will have to wait and see.”

In a later post, he added: “At the end of January 2025, active housing inventory for sale was up 36 percent year-over-year in the Washington D.C. metro area. However, it’s still 33 percent below pre-pandemic 2019 inventory levels. There, greatest softness in the Washington D.C. metro area is the urban core of the District of Columbia. In particular, condos in the heart of D.C.”

Realtor.com senior economist Joel Berner, said: “DC is not a booming market, but it’s not crashing either. It’s really pretty average within a national market that’s also cooling.”

Jay Nix, an agent with Compass Real Estate, told Fox 5 DC: “We are hearing from buyers and some sellers that they want to wait it out and see how things play out in the next few months. So right now, no fire sales, no deals to be had yet.”

What’s Next

The Trump administration’s efforts to reduce the size of the government through layoffs and sweeping cost cuts are widely expected to continue and even accelerate in coming weeks. Their impact on the Washington D.C. housing market and other cities with a concentration of federal workers will become clearer throughout the year.