Elon Musk’s DOGE Reforms Aren’t Sending DC’s Housing Market Into a Death Spiral Yet, Despite Panicked Claims

Recent reports of the death of the Washington, DC, housing market are greatly exaggerated, according to listing data and local real estate agents.

In recent days, false claims have circulated widely on social media alleging that Elon Musk‘s efforts to slash federal spending through the Department of Government Efficiency have triggered a fire sale of homes in the DC area.

One widely shared image used the mapping function on Realtor.com® to show what appeared to be a huge proliferation of new listings in the DC suburb of Arlington, VA. 

However, the image was deceptively zoomed and cropped, with each listing icon covering more than a mile of distance on the map, falsely making it appear that nearly every home in the area is for sale.

In reality, Realtor.com listing data does not show a dramatic shift in DC home prices or listing activity since President Donald Trump took office in late January.

Although inventory is rising and prices are cooling in the DC area, those trends predate the election, and are largely in line with national trends.  

“DC is not a booming market, but it’s not crashing either,” says Realtor.com senior economist Joel Berner. “It’s really pretty average within a national market that’s also cooling.”

Over the first two weeks of February, 2,829 homes were newly listed for sale in the DC region.

While that might seem like a lot, it is just nine more than the 2,820 that hit the market in the same period last year, according to Bright MLS, the regional listing service that covers the mid-Atlantic.

Realtor.com data does show that the total supply of homes for sale in metro DC is up about 40% from a year ago. But the overall supply of listings has also been rising nationwide for some time, after home sales slowed last year to their lowest level since 1995.

Listing prices in the DC area are down 3% from last year. But again, this is fairly in line with national trends, which have seen listing prices decline 1.4% annually so far this year.

As well, roughly 5% of active listings in the DC area had price reductions in the first half of February, a virtually unchanged share from the same time a year earlier.

Local real estate agents say that while the new Trump administration has introduced uncertainty into the DC housing market, they aren’t seeing panic selling yet.

“We are hearing from buyers and some sellers that they want to wait it out and see how things play out in the next few months,” Jay Nix, an agent with Compass Real Estate, told Fox 5 DC. “So right now, no fire sales, no deals to be had yet.”

Trump’s impact on the DC housing market remains to be seen

While the recent social media claims of a DC housing market crash are false, that doesn’t mean that Trump, Musk, and DOGE won’t affect the capital city’s housing market in the future.

Changes to government spending and hiring policies have an outsized impact on DC, and the upcoming spring selling season could provide more clues about which way the area’s home market is heading.

Government layoffs could depress buyer demand—but on the other hand, Trump’s emphasis on a return to in-person work could spur home sales, especially in locations closest to government offices.

Still, the casual observer might tend to overestimate the role of government employees in the DC economy. 

Only about 9% of the DC regional workforce is directly employed by the federal government.

While many more work for government contractors or are otherwise tied indirectly to government spending, the idea of dismantling DC’s economy overnight seems unlikely.

“Given the highly educated workforce in the DC region, many companies want to tap that workforce,” Lawrence Yun, chief economist of the National Association of Realtors®, told NBC Washington.

As spring approaches, one key indicator in the DC housing market even shows signs of strengthening.

Time on the market, or the number of days a home spends actively listed before going under contract, dropped significantly in the first half of February compared with last year.

“The things we’d look for in a market that is truly struggling is an increase in time on market, an increase in price reductions, and a decrease in median listing price,” says Berner.

“Homes in the DC metro are spending less time on the market than they were a year ago, are seeing less than half a percentage point more price reductions than they were a year ago, and have prices down about 3% compared to a year ago,” he adds.

“With the national median listing price also falling, that last data point doesn’t hold its usual sway.”