Inventory Surges

After years of tight inventory, the DC Metro now boasts over 7,800 active listings, a dramatic 35% jump compared to last summer. The surge comes largely in the wake of widespread federal workforce reductions, with over 75,000 employees accepting buyouts or facing relocation. This sudden influx has flooded suburban markets like Arlington, Alexandria, and Montgomery County with homes. It has also created more choice than buyers have seen in years.

Price Trends

Despite softening activity, home values are holding steady or ticking up slightly in most submarkets. In Washington, DC proper, homes are taking longer to sell (averaging 56 days on market, up from 42 days last summer). Some sellers are still holding firm to 2022 price expectations, which is leading to price cuts and extended listing periods, especially in the $800K–$1.5M range.

That said, prime homes in iconic areas like Georgetown, Kalorama, and Capitol Hill continue to command top dollar, when priced strategically.

Luxury Market

At the top end of the market, it’s a different story entirely.

The ultra-luxury segment is seeing strong cash buyer activity, especially from Silicon Valley elites and international investors seeking DC bases for political and diplomatic reasons. In fact, a recent Architectural Digest feature highlighted a string of major acquisitions in Kalorama and Massachusetts Avenue Heights, fueled by billionaires and former tech CEOs looking to establish permanent East Coast influence.

Some of the capital’s most desirable listings never hit the public market, instead changing hands through exclusive agent networks or private channels. If you’re playing in this arena, discretion and relationships matter as much as price.

Where Is It All Heading?

While the overall DC market is cooling from its pandemic-era fever, the shift is more a rebalancing than a retreat. Here’s what to expect heading into fall 2025:

More listings and slower sales may give buyers more leverage. This will be seen particularly outside the core city.

Sellers will need to be more strategic, realistic, and presentation-focused to attract qualified offers.

The luxury market will remain resilient, driven by political migration, legacy wealth, and cash-heavy buyers.

If mortgage rates ease as expected by year-end, activity could rebound modestly, especially for first-time and move-up buyers.

Washington, DC has always been a nuanced market. What’s true in Bethesda might not apply in Adams Morgan. As inventory grows and macro conditions shift, it’s the savvy players who will win – those who know their comps, understand buyer psychology, and are willing to adapt.

Whether you’re buying a $1.2M townhouse or a $12M embassy estate, now is the time to be bold but smart.