Getty Images
The housing market in the nation’s capital continues to be affected by the DOGE layoffs—spearheaded by its now-former leader, Elon Musk.
The reduction in the federal workforce created a ripple effect in the metro housing market as approximately 75,000 federal workers accepted a buyout offer.
In May, at least 4 in 10 real estate agents worked with clients whose decision to buy or sell was due to the layoff and/or cuts in the federal workforce, according to a new Bright MLS study.
Washington, D.C., is facing a wave of inventory driven by early retirements and uncertainty among federal employees.
“This spring marked a turning point for the Washington housing market,” says Lisa Sturtevant, chief economist at Bright MLS.
After President Donald Trump took office on Jan. 21 and created DOGE (Department of Government Efficiency) to root out waste and fraud—tens of thousands were left without a job in D.C.—either from layoffs or buyouts.
Over half of D.C. area real estate agents surveyed said that federal workforce reductions are affecting market activity. 43% said they’ve seen an uptick in sellers, and only 3% reported seeing more buyers due to the DOGE layoffs.
Retirees leading the way
While there’s been a shift in the housing market, the Bright MLS survey found that exact details on the “type” of workers who left the federal government workforce were not easily identifiable, but based on the real estate agents they surveyed, those agents report the buyout offer may be driving retirement decisions among home sellers in the greater D.C. region.
The report reveals in the greater Washington, D.C. area, retirees are leading the sell-off. 15% of spring home sales were due to retirement, compared to just 10% across the broader Bright MLS area (D.C., Delaware, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia).
The retirees, many of whom were federal employees, were identified as having “above-average incomes” and a “fully paid-off home”—which allowed them financial means and incentive to take buyout packages and possibly move out of the region.
“Federal buyouts provided older, often higher-income homeowners a chance to cash out and relocate, but the ripple effects are just beginning,” says Sturtevant. “As more impacted families list homes post-school year, we could see further price pressure across the region this summer and fall.”
(Chip Somodevilla/Getty Images))
(Bright MLS)
Pricing pressure
Bright MLS reports that home prices in the D.C. area remain higher than national averages. The May median listing price in the Washington, D.C.; Arlington; and Alexandria metro is $634,900, according to Realtor.com® data.
Real estate agents are reporting “growing price sensitivity” and early “signs of decline”—with 38% indicating that workforce cuts are contributing to falling prices. While 2% pointed out small price increases tied to tighter inventory in certain areas.
But with home listings increasing, the survey points out that sellers are more likely to reduce asking prices or offer concessions to close deals.
Other agents point out that they’re expecting a second wave of homes to be listed this summer from families who waited until after the school year to relocate.
“Federal agencies have recently begun rehiring a limited number of laid-off workers, and no new cuts have been announced,” says Sturtevant.
“However, with buyout payments ending later this summer, more selling activity may still be on the horizon. By fall, the increase in inventory in the region could lead to flat or falling home prices in some markets in the region.”