Washington DC real estate statistics and trends for 2023

WASHINGTON, DC – This article will look at current real estate trends in Washington, DC. We will see rents outpace home value appreciation, downtown condo sales are on the rise, and the office and retail real estate sectors are recovering.


Rents outpace home value appreciation

While Washington, DC is still one of the best places to invest in real estate, there is a shift in the real estate investing community. Many investors are turning to rental properties rather than flipping homes. This is partly due to relatively low interest rates, which can offset higher acquisition costs and help increase monthly cash flow.


Although the Washington, DC housing market has been slow to rebound in recent years, it is still a viable market that meets the needs of households of all incomes. The median price of a home on the market today is $708,135.

Downtown condo sales are on the rise

The district’s government sector and a large number of biotechnology companies in the suburbs are driving growth in the area. Additionally, Amazon HQ2 is under construction and should help the local economy. However, the current infrastructure is not yet fully developed and needs to be upgraded.


However, there are also other factors that are holding back downtown DC real estate. A number of companies are adopting hybrid and remote work policies. This suggests that banking on pre-pandemic desktop levels may not be as reliable as it once was. As a result, some city leaders are trying to attract new businesses, schools, and people to the area. By doing so, they hope to make downtown a destination to live, work and play.

The commercial real estate sector is recovering

The commercial real estate sector in Washington, DC is slowly recovering from the decline seen earlier this decade. As the downtown DC market struggles with a decrease in foot traffic, mixed-use areas are recovering faster. This is partly because mixed-use areas have a higher concentration of residential tenants. The first quarter of 2021 saw increased uptake in the mixed-use submarket. Despite this, the office-dense submarkets again accounted for the negative absorption rate for the quarter.


The multifamily market in DC is expected to continue its recovery. However, hotel valuations are expected to remain volatile during the recovery. Many factors affect the overall market. Supply chain shortages and rising construction costs will continue to affect the market. Rising interest rates and increasing labor shortages are also expected to impact the market. Additionally, the mayor’s office has prioritized supporting declining areas and increasing housing affordability.

The office sector is recovering

The office sector is recovering in the District, albeit slowly. Its availability rate is at an all time high, 15%, according to Colliers International. This figure does not include employees who do not show up for work. The city is also celebrating the first anniversary of COVID next month. Most Manhattan offices are vacant most of the day. And because the COVID rollout is still on a shaky footing, it’s likely to stay that way for some time.

The office sector in Washington, DC has suffered in recent years from declining demand and a spike in vacancy, which is tipping the momentum against landlords. Despite this, experts see signs of recovery. New Q1 reports show that office absorption has declined slightly in the DC metro area and mixed-use submarkets have begun to recover.

Office occupancy rates approach pre-pandemic levels

The office market has recently shown signs of stabilization, with stable rental and construction activity in the First District. However, when the outlook for the future deteriorated, rental activity fell sharply. With more clarity in the market, office tenants have approached their rental decisions with more confidence. Although changes in office space needs have varied by neighborhood, overall occupancy rates have been below pre-pandemic levels in city centers.

Long-term rental properties are becoming more popular

As the millennial population grows, the rental market is expected to see a continued upward trend. The third quarter of 2019 saw multifamily transaction dollar volume growth of 9%. The Harvard Rental Market Report includes a range of statistics but no Covid-19 era data. Despite the positive trend, the increase in housing demand will not prevent prices from rising.

Rents in Washington DC rose 1.1% over the past month and 5.7% from the same period last year. The median rent in DC now stands at $1,838 for a one-bedroom apartment and $1,816 for a two-bedroom apartment. However, the growth rate is below the national average of 10.0%.

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