A new study takes a closer look at federal workforce reductions under the Trump administration’s Department of Government Efficiency (DOGE) initiative that are creating a ripple effect across the Washington D.C. metro housing market.
Data from Bright MLS reveals that nearly 40% of real estate agents in the D.C. region reported working with clients in May whose decisions to buy or sell were directly tied to layoffs or federal buyout offers. According to the survey, the housing market in the nation’s capital, long known for its stability, is now facing a wave of inventory driven by early retirements and uncertainty among federal employees. The trend is putting downward pressure on prices and may signal a broader reshaping of homeownership patterns across the region.
“This spring marked a turning point for the Washington housing market,” said Lisa Sturtevant, Chief Economist at Bright MLS. “Federal buyouts provided older, often higher-income homeowners a chance to cash out and relocate, but the ripple effects are just beginning. As more impacted families list homes post-school year, we could see further price pressure across the region this summer and fall.”
DOGE Downsizes Neighborhoods
DOGE, an initiative of the second Trump administration, is not a Cabinet-level department of the government, but a temporary contracted government organization under the U.S. DOGE Service, formerly known as the U.S. Digital Service. DOGE’s stated purpose is to reduce wasteful and fraudulent federal spending, and eliminate excessive regulations. The organization was created to “modernize federal technology and software to maximize governmental efficiency and productivity.”
DOGE has taken action toward its goal of rooting out government fraud, waste, and abuse of taxpayer dollars, having targeted a number of DEI initiatives and federal agencies, including the Consumer Financial Protection Bureau (CFPB), National Aeronautics and Space Administration (NASA), Department of Education (DOE), U.S. Agency for International Development (USAID), Federal Aviation Administration (FAA), Treasury Department, Federal Emergency Management Agency (FEMA), and the National Oceanic and Atmospheric Administration (NOAA), among others.
The CFPB, founded in the aftermath of the 2007-2008 financial crisis to protect consumers from abusive or deceptive financial practices and ensure financial markets are fair, transparent, and competitive, and has been a constant target of DOGE. To date, approximately 1,500 Bureau employees have been cut, including those who have been fired or placed on administrative leave.
Flee D.C.
The Trump administration’s February buyout program offered up to eight months of salary and benefits to encourage federal workers to voluntarily resign. According to the Office of Personnel Management, approximately 75,000 employees accepted the offer.
“Quite a few people in D.C. are selling their homes because they’re losing their jobs,” said local Redfin Premier Real Estate Agent Mary Bazargan. “Many of those people are planning to leave the area because the cost of living is high, and they want a new job that allows them to work remotely and be closer to family. I recently worked with a buyer who bid on a home, offered more money than any other buyer and waived all contingencies. Still, the seller ended up going with an all-cash offer because all of the layoff news made them nervous about accepting offers from financed buyers.”
The federal workforce cuts, however, are not impacting all homeowners equally. The Bright MLS survey reveals that in the greater Washington D.C. region, 15% of spring home sales were due to retirement, compared to just 10% across the broader Bright MLS service area. Many of these retirees were federal employees with above-average incomes and fully paid-off homes, giving them the financial means and incentive to take a buyout package and move out of the metro D.C. region ahead of potential DOGE actions.
A recent Redfin report found that active listings of homes for sale in the Washington, D.C. area jumped 25.1% year-over-year to the highest level since 2022 during the four weeks ending April 27—the largest gain on record. By comparison, active listings nationwide rose 14.2%—the smallest increase since March 2024. Redfin also found that new listings in D.C. rose 11.4% year-over-year to the highest level since 2022—nearly double the national gain of 5.8%.
“Federal agencies have recently begun rehiring a limited number of laid-off workers, and no new cuts have been announced. However, with buyout payments ending later this summer, more selling activity may still be on the horizon,” Sturtevant said. “By fall, the increase in inventory in the region could lead to flat or falling home prices in some markets in the region.”
DOGE Takes on the Commercial Space
And while Bright MLS and Redfin thoroughly examined the impact of DOGE actions on the residential market, House Buyers of America analyzed the impact of DOGE on the commercial space. Most commercial properties depend on foot traffic, nearby infrastructure projects, or leasing to government-backed tenants, and as DOGE actions continue to impact thousands of employees through layoffs and restructuring.
“It’s simple: when budgets shrink, vacancies rise and ROI falls,” said House Buyers of America in their report. “Stay alert to government-backed anchors or developments near your properties.”
FOX News reports that DOGE leadership is hoping to give the U.S. Treasury a boost in cutting $36 trillion in national debt by selling off some major D.C. area real estate, currently home to several prominent cabinet agencies. Among the targeted properties are the headquarters of the Departments of Energy (DOE) and Housing & Urban Development (HUD), along with ancillary buildings, according to Sen. Joni Ernst. Taxpayers shell out approximately $81 million to maintain underutilized or unutilized federal offices, according to a Biden-era report to Congress from the Office of Management and Budget.
