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s a seasoned Realtor and Arlington resident, I've been observing the local real estate market's resilience in the face of uncertainty. The recent announcements of government workforce and contract cuts have sparked concerns about their impact on demand and values. While it's challenging to predict the future, my team and I have noticed that most sub-markets are still experiencing strong sales activity.

    The data suggests that despite a decrease in market intensity, characterized by fewer multiple offers and lower price escalations, the overall market remains robust. In fact, our recent transactions have shown that buyers are still eager to purchase homes, albeit with some caution. This is particularly evident in areas like Arlington County, where supply levels are low, and prices continue to rise.

    However, not all sub-markets are created equal. Some areas, such as D.C. condos, are more vulnerable to a drop in demand due to their already high supply levels. In contrast, neighborhoods like Arlington's $1M-$2.5M range have incredibly low inventory, which should help prices weather any potential storm.

    The chart below illustrates the significant decrease in Months of Supply (MoS) over the past decade, indicating that the Northern Virginia market can absorb a modest drop in demand without experiencing negative appreciation.

    Months of Supply | Northern Virginia

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    Q4 2015: 2.32 MoS

    Q4 2024: 0.78 MoS

    This means that even if demand drops by 10-20%+, the effect on real estate values will likely be limited to lower appreciation, rather than depreciation.

    As we navigate this complex landscape, it's essential to focus on sub-market-specific data and Months of Supply levels. For example, Arlington condos may have some runway to handle a drop in demand, while D.C. condos are more susceptible to price pain.

    Other opposing forces, such as the Return-to-Office (RTO) requirement, will undoubtedly impact the market in various ways. However, with good data and strategic decision-making, buyers and sellers can navigate these challenges and make informed decisions.

    If you're considering buying, selling, or investing in the 2025 real estate market, I encourage you to reach out to me at [email protected]. Let's discuss your specific needs and create a tailored plan for success.