DOGE layoffs are starting to leave their mark on D.C.’s housing market

The DOGE effect is finally here.

After months of speculation, there are growing signs that the housing market in the Washington, D.C., metro area is starting to shift, and federal workforce layoffs are to blame, according to new data from Bright MLS, the multiple listing service that serves the mid-Atlantic region.

For-sale inventory in the region is spiking, driven in part by early retirements and general economic uncertainty. While prices are holding steady for now, some real estate agents are reporting buyer hesitancy that could translate to lower prices down the line.

Nearly 40% of D.C.-area agents surveyed by Bright MLS said they worked with clients who were buying or selling due to federal layoffs or buyout offers last month. Over half said the job cuts were affecting the market, and 43% reported seeing more sellers.

“The key word is uncertainty — total uncertainty,” said Diane Yochelson, a Realtor at Compass in Bethesda, Md., just northwest of the city. “One day you go to work, and the next day you’re done — you can’t even go back to your office.”

Yochelson has had several clients in government contracting who were affected by the cuts. One, who was laid off in February, was hoping to buy a home in the region before her son started kindergarten. Now, several months later and still unemployed, she’s thinking about living elsewhere.

“People are now considering leaving the D.C. area,” Yochelson said. “Even if it’s a two-income family and only one person has lost their income, because of the financial straits they’re in, they may look to go someplace else where it’s more affordable.”

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As of May, there were more than 13,500 homes for sale in the D.C. metro area, according to Realtor.com, nearly double the inventory available a year earlier. Listings have increased nationwide, but there’s evidence that at least some of the jump in the D.C. area is tied to the Department of Government Efficiency’s efforts to shrink the federal workforce through layoffs and buyouts, said Lisa Sturtevant, Bright MLS’s chief economist.

Agents and brokers reported that some 15% of spring sellers in D.C. were selling due to retirement, compared with less than 10% in the broader mid-Atlantic region. Earlier this year, the Trump administration offered a buyout to federal workers, offering up to eight months of salary and benefits. Around 75,000 took the offer. Though federal workers are based all over the country, about 15% live in the D.C. area.

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While inventory is climbing, prices haven’t shown any signs of easing yet. The median home in the area sold for just under $660,000 in May, up 3.1% from a year ago, according to Bright MLS data.

But Sturtevant thinks prices can’t continue to grow as aggressively in the months ahead.

“We’re at a point now where there’s enough inventory that’s come on the market that we are starting to see a change in prices,” she said. “We’ll continue to see prices grow more slowly and possibly actually decline year over year in some local markets.”

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Cliff Cohen, an estate planning lawyer, knew he was taking a gamble when he decided to put his condo in Friendship Heights, Md., on the market in April with the goal of relocating to Florida. After a number of showings, but no offers, he pulled it this month and plans to re-list in the fall in hopes of finding a stronger market.

“We see the buying pool not only diminished, but also those people that would like to buy are afraid to pull the trigger,” Cohen said. “There’s so much uncertainty now."

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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