Washington, D.C. Housing Market Showing Mark Left By DOGE Cuts
Months after thousands of federal workers were fired following investigations by the Department of Government Efficiency (DOGE) under Elon Musk, the Washington, D.C. housing market is starting to show the impact of the mass layoffs.
According to a new report by Redfin, the number of homes listed for sale in the nation's capital is growing at the same time as sales are dwindling, as federal workers try to off-load their properties to increasingly cautious buyers.
Growing Inventory And Falling Sales
While there was some movement in the Washington, D.C. housing market immediately after DOGE announced its mass layoffs, experts warned that it would have taken time for their impact on the city's housing market to become clear. The time, it seems, is now.
The total number of homes for sale in the Washington, D.C. metropolitan area surged by 22.7 percent in June compared to a year earlier—the third-biggest jump in records dating back to 2012, according to Redfin. The two other bigger increases were reported in the previous months, May (+25.5 percent) and April (+23.9 percent).
This increase seems partially linked to the recent federal workforce layoffs. According to a recent survey conducted by Bright MLS, a Mid-Atlantic real estate marketplace, nearly 40 percent of real estate agents in the Washington, D.C. metro area said they have worked with a client whose decision to buy or sell was due to federal workforce layoffs and cuts in the last six months.
The afternoon sun shines on residential and commercial buildings with the St. Elizabeth's water storage tower in the background on May 24, 2025, in Washington, D.C.
The afternoon sun shines on residential and commercial buildings with the St. Elizabeth's water storage tower in the background on May 24, 2025, in Washington, D.C.Buyers are not exactly jumping on this additional inventory. In June, pending home sales were down 0.3 percent year-over-year. The homes that sold, on the other hand, took 10 days longer to get under contract (36 days against 26 days) than they did a year earlier. Partially, while inventory is now higher in Washington, D.C. listings which are not being picked up by buyers are piling up in the capital's market.
Sellers are also increasingly being forced to offer discounts on their original asking prices to lure in buyers. Roughly one third of homes (35.7 percent) sold over asking price in June, down from nearly half (47.8 percent) a year earlier, according to Redfin.
Despite these shifts, the median sale price of a home in the Washington, D.C. metro area remains high: in June, it was $608,000, up 2.1 percent from a year earlier. But on a month-to-month basis, prices of single-family homes in the nation's capital fell 1.8 percent in June from May—the second-biggest decline on record after that reported in May (-1.9 percent).
A Reshaping Of The Washington, D.C. Housing Market
For Redfin experts, the recent growth in inventory and stalling sales are a sign of the impact that DOGE's mass layoffs have had on the Washington, D.C. housing market.
"The local market is recalibrating and the pace of sales is slowing, partly due to federal job cuts," said Marshall Park, Redfin's senior market manager in Washington, D.C. "For sellers, that means they have to be strategic about pricing, staging, and marketing—and they need to be realistic about what they're going to get for their home," he added.
"But buyers have a window of opportunity: more inventory means they're able to be patient and picky, and they're sometimes able to negotiate prices down and get concessions from sellers."
While DOGE's cuts have increased uncertainty in the Washington, D.C. market, it is worth remembering that a majority of residents in the metro area are not federal workers. In part, the current shift reflects what is going on in the rest of the U.S. housing market, where demand is cooling down as buyers struggle with rising costs and historically elevated mortgage rates, and inventory is growing.
But in Washington, D.C, the total number of active listings is rising faster than nationally, according to Redfin, where there were 13.3 percent more homes for sale in June than there were a year earlier. Inventory is likely rising faster in Washington, D.C. than at the national level because the city's economy is so closely tied to the federal government, Redfin said.
Washington, D.C. has no natural resources or major industries to fall back on if its federal workforce should drastically be reduced. If workers whose jobs are imperiled decide to leave the city en masse, its housing market could be in serious trouble.
More layoffs in the future are likely to follow a recent decision by the Supreme Court to allow President Donald Trump to pursue mass layoffs and the downsizing of several federal agencies.
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