H
ere are Melissa's 5 bold predictions for DC area real estate in 2025:

    The Buyers Are Coming Back

    I've been saying it all year: this is the time to buy. People tend to focus on the present, but I knew that after a tough market, buyers would return. The soft spots in the DC area market are August and December, and since we didn't see a recovery in September, I expected the market to bounce back in the spring. The sharp rise in interest rates has set a new normal, and it's time for buyers to get back out there.

    When people ask about the spring market, I tell them I'll know on January 2nd. That's when potential clients start reaching out to agents like me. This year was no exception, with several calls from interested buyers in the first week of January. It's going to be a busy season.

    DC Real Estate Will Bounce Back

    The city itself, not just the metro area, will see a rebound in 2025. Last year, buyer interest in DC properties plummeted due to increased crime and safety concerns. However, with a significant decrease in homicides, robberies, and assaults, the city is experiencing a resurgence. In fact, the Mayor's office reported that DC had its biggest single-year population gain since 2013, adding 15,000 residents.

    Administration Changes Won't Affect Real Estate

    The myth that administration changes lead to an exodus of people from DC is just that – a myth. The data shows no significant change in sales during election years. While some high-ranking officials may buy homes, it's often the high-end properties that make headlines. In reality, many people who work in the administration commute back and forth or rent apartments.

    Back to the Office

    The empty office buildings will eventually fill up again. Some have been converted into residential spaces, but others are being reclaimed by companies. The push for government efficiency may lead to some job cuts, but it's unlikely that 100,000 jobs will be eliminated. If they are, many employees will find new opportunities elsewhere.

    Different Price Points, Different Realities

    The luxury market will continue to thrive in 2025, with business as usual. However, the sub $600,000 price point will see more activity as buyers return to the market. The biggest changes happened in this price range last year, where interest rates made it difficult for first-time buyers to afford homes. With mortgage rates expected to come down again in 2026, I expect the sub $600,000 market to continue growing.