Actions by President Donald Trump and his Department of Government Efficiency (DOGE) have resulted in a multitude of layoffs. While there is no official tally of layoffs, as of Feb. 12, around 75,000 federal employees have accepted a deferred resignation plan, according to a report from the Associated Press, citing the Office of Personnel Management (OPM). Along with these, there have been wide-ranging layoffs of probationary employees (those without civil service protection) that, if they continue, could affect hundreds of thousands of people.
These layoffs have led to viral speculation that the Washington, D.C. housing market is collapsing. The idea is that a large part of D.C.’s workforce is tied up in government jobs, and with the flood of people out of work, many are putting their house on the market. But the data doesn’t align with this hypothesis right now. Here’s why.
No, the Washington, DC housing market isn’t crashing right now
When people are laid off, their first financial move isn’t selling their home. Those laid off in the D.C. area are likely to first look for other jobs, apply for unemployment and assess their financial situation, says Mike Simonsen, founder and president of real estate data firm Altos Research.
“After several months of that, if you’re still unemployed you might start thinking about selling,” says Simonsen.
If government layoffs lead to a deflating D.C. housing market, we likely won’t know that until further down the road. Until then, housing inventory remains tight, showing both persistent demand and enough people who want to stay in their homes.
“Inventory in the D.C. metro is still very restricted. It could climb this year, but is unlikely to get anywhere near a critical level of oversupply in the short term.”
— Mike Simonsen
Founder and president, Altos Research
“Inventory in the D.C. metro is still very restricted. It could climb this year, but is unlikely to get anywhere near a critical level of oversupply in the short term,” says Simonsen.
In February, Realtor.com released a statement as part of its monthly housing report pointing out that D.C.’s market has yet to show trends that define a crashing housing market, such as: inventory growth, increased time on market and decreases in prices. However, the report also notes that the amount of price reductions has risen every week in February, cautioning that “broader effects could become more apparent as the spring market unfolds. Buyers and sellers in the region might want to monitor trends closely as the market continues to adjust.”
Another thing to consider is the makeup of Washington, D.C.’s job market. Only 11 percent of workers in D.C. are employed by the federal government, according to Realtor.com.
“Ninety percent work in the private sector, many are government contract-related, but nonetheless, given the highly educated workforce in the D.C. region, many companies want to tap the workforce,” said Lawrence Yun, chief economist with the National Association of Realtors, in an interview with D.C.’s local NBC News affiliate, News4.
Learn more: Should I sell my house now or wait?
The DC housing market is in-line with the national housing market
The median listing price per square foot in D.C. was down 3.3 percent year-over-year in February, according to Realtor.com. This drop is not out of line with the rest of the country, with many areas experiencing year-over-year declines. However, it’s important to note that prices are still much higher in D.C. than they were pre-pandemic. In fact, the median listing price per square foot was up by over 58 percent in February 2025 from February 2019.
Many markets have seen similar rises in listing prices over the past five years, only to see prices dip at the start of 2025. In fact, Washington, D.C.’s February median list price per square foot places it 21st in price drops among the 50 largest metros — not far from the middle of the ranking.
New listings in metro D.C. were up by 8.5 percent year-over-year. This puts it close to other cities like Houston (8.8 percent), Charlotte (9.3 percent) and Atlanta (7.1 percent), and below both the Northeast (9.2 percent) and the South (29.9 percent) regions.
Still, things could change for D.C. in the future. Along with the tumultuous job market, it’s important to remember that it takes time to list and sell a house. Realtor.com estimates that it takes most people two weeks or more to get a house ready to sell. That further delays any effect federal layoffs will have on the housing market.
Markets where prices are falling sharper than DC
Twenty metro areas saw a larger year-over-year decrease in median listing price than Washington, D.C. in February 2025. These range from a decrease of 3.6 percent in Seattle to a drop of 9.9 percent in Kansas City, Missouri.
The five markets with the largest year-over-year median price decreases were:
- Kansas City, Missouri (-9.9 percent)
- San Francisco (-9 percent)
- Austin, Texas (-7.9 percent)
- Columbus, Ohio (-7.2 percent)
- Miami (-6.4 percent)
Something to note is that most of these metros have seen large increases in listing prices since 2019. For instance, median listing prices in Kansas City are still 21.4 percent higher than they were in 2019. Prices in D.C. are up by 28.9 percent from February 2019, putting it 30th in price increases since 2019 — again close to the middle of the pack.
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