Depending on whether one takes a long- or short-term perspective, the housing market around the nation’s capital is getting back to a normal state, or it’s still feeling rather uncertain.
The longer-term picture is that the median home price in the region that includes Washington, D.C., rose 2.9% in August from one year earlier, according to Homes.com data. That’s normal in the sense that it’s about the same price increase the region saw in 2018, before the pandemic contributed to annual hikes that sometimes exceeded 10%.
The median price last month was $585,000 across the Washington region, well above the U.S. median of $389,000 and near the middle of the pack for large cities. Detached, single-family homes’ median price was $710,000 around the region; that was up more than 5% from a year earlier. Condo prices also rose 5%, but prices for townhouses were flat.
“After several years of elevated appreciation, DC’s housing market has largely normalized. Prices are still rising, yet the pace is calmer,” said Melina Duggal, a senior director of market analytics at Homes.com.
The short-term view is colored by ongoing layoffs of federal workers, who have a significant impact on the region’s housing trends because there are so many of them. Duggal said it’s still unclear how many of those workers took buyouts, which would have kept them on payrolls until the end of this month. Between January and mid-July, the federal government shed 148,000 workers, according to the D.C.-based nonprofit group Partnership for Public Services.
Another factor that could impact the region's housing market is the highly visible presence of federal agents and the National Guard around Washington that started in early August.
Wael Mousine, founder of The CapitalHaus Group, a consultant for buyers, sellers and home investors in the region, wrote in a LinkedIn article last month that one effect of the federal presence is to further cement buyers' advantage in the market, if they want to buy.
"The optics of military presence on city streets fuel a perception that safety remains fragile," Wael Mouhsine, founder of The CapitalHaus Group, a consultant for buyers, sellers and home investors in the region, wrote on LinkedIn last month.
"Perception matters. And in real estate, perception can influence prices, buyer confidence and neighborhood desirability as much as statistics," Mouhsine wrote.
One way these issues may be manifesting themselves is in the amount of housing for sale in the Washington region. According to new Homes.com data, the supply rose 40% in August from one year earlier.
The disruption in the federal workforce has affected the housing market in a number of ways, real estate agents told Homes.com earlier this summer, including more houses for sale but also fewer people in a position to buy. Some people who had considered buying decided to move out of the region or looked at renting instead. These factors are driving down price increases, and could eventually cause prices to fall.
“Uncertainty surrounding federal government layoffs and budget cuts have made prospective buyers and sellers more cautious,” Bright Multiple Listing Service said in its own report on August’s housing market.
Northern Virginia saw a 1.6% rise in its median sale price in August from the same month in 2024, according to Homes.com data. Meanwhile, the Northern Virginia Association of Realtors reported that sales in this part of the Washington region had increased 2% from a year earlier, and the number of homes for buyers to choose from was up 36%.
Places in Northern Virginia that saw notable annual median price hikes include Fairfax City, at 13%, and outlying Fauquier County, at 11%, according to Homes.com. Alexandria and Arlington County, close to Washington, D.C., both saw increases of about 9%.
"Buyers are no longer racing against the clock the way they were a year ago, but the increase in total sales volume and higher prices shows that demand for Northern Virginia housing remains strong," the association’s chief executive officer, Ryan McLaughlin, said in a statement last week.