Could DOGE Smash Washington, DC’s Real Estate Market?

Since the start of the second Trump presidency, Elon Musk’s Department of Government Efficiency (DOGE) has been taking a hammer to the federal bureaucracy, or at least threatening to. 

DOGE is pitching its cuts as necessary actions that will save the government money, while critics allege that the cuts will cripple essential functions of government, and that a pseudo-agency like DOGE may not even have the legal power to make them. 

There has also been some speculation about the second-order political and economic effects of the cuts. Major budget cuts in the state of Virginia, home to a lot of government employees, have a chance to hurt that state’s Republican Party in a year in which it will elect a new governor. 

Also, there are worries that a massive, sudden reduction in public-sector jobs could affect the unemployment rate and the larger economic picture—although the 77,000 workers who accepted a buyout offered by DOGE will continue to be paid through September, so the effect will be less immediate. 

Another question raised is whether the housing market in Washington, D.C., will be affected by a lot of federal workers losing their jobs. 

Opinions Differ on DC and DOGE Impact on Real Estate 

Newsweek reported last month, citing a real estate trading platform called Parcl Labs, that home prices in Washington had fallen by 11 percent since the start of 2025. The average price per square foot of a home, which is Parcl’s measurement unit, dropped to $474.36 as of February 18—a 7.2 percent decrease from early January. The price is also calculated from the same date in 2023 and 2024. 

Those numbers are for the District itself, although prices have also dropped, albeit by less, in the greater DC metro area. Some government workers who work in Washington live in Maryland or Virginia. 

Parcl did say there are other reasons for the housing price drop, at least so far. “”D.C. housing weakness—particularly at the city level—predates DOGE,” the platform said, per Newsweek. 

Indeed, a report by realtor.com last week claimed that the DOGE reforms are not sending the district’s housing market into a “death spiral,” at least not yet. According to the report, a “widely-shared image” had used realtor.com‘s own mapping systems to show what it purported to be “a huge proliferation of new listings” in Arlington, Virginia, near Washington. 

However, realtor.com slammed the image as “deceptively zoomed and cropped.” The site went on to make clear that its actual data “does not show a dramatic shift in DC home prices or listing activity” since the return of Trump and the establishment of DOGE. 

The site states that inventory has risen, with prices dropping, and those are trends that have continued since before the change in presidential administrations. It is possible, however, that this could change. 

There’s a new administration in charge, meaning that new employees of the administration are coming to town and buying houses. Further, the new administration has imposed a return-to-office mandate, which could lead some people to buy houses near where they work. 

A Spread-Out Government 

It’s often assumed that because Washington, D.C., is the seat of the federal government, that must mean that all or most government employees are concentrated there. 

But that’s not quite true. According to an Associated Press analysis this week, only about 20 percent of the federal government’s 2 million civilian employees are based in Washington. However, a great deal more reside in Maryland and Virginia.

Based on Census Bureau data, 18.2 percent of the workforce of one particular congressional district in Maryland is composed of federal employees. 

However, there are also larger-than-expected concentrations of federal workers in certain parts of Alabama and Oklahoma, which are represented by Republican members of Congress who could face political heat if there are big cuts.

Some places have military bases, while others are leaders in aerospace. Six percent of the population of the whole state of Alaska is made up of federal workers. 

About the Author: Stephen Silver 

Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter