DC home sellers are bleeding out, and buyers still won’t bite.
Washington’s housing market has hit a grim milestone. Nearly one in five homes for sale in the nation’s capital is listed for less than the owner originally paid, the worst mark in the country, according to fresh data from real estate analytics firm Parcl Labs.
The number, 17.8%, dwarfs every other state and territory tracked. Colorado is a distant second at 11.8%. Florida and Hawaii are tied at 10.9%. Arizona rounds out the top five at 10%. The national average sits at just 6.9%.
The numbers ask a very obvious question: Why are so many DC home sellers willing to walk away at a loss?
Parcl Labs’ own research points to an answer that has little to do with a flood of new construction and everything to do with buyers who simply aren’t showing up.
In an August report titled “Washington, DC: The Housing Correction Enters a New Phase,” the firm found that unlike overbuilt Sunbelt markets in Florida and Texas, DC’s slump has been driven primarily by weak demand rather than oversupply.
District home prices were down 1.6% year-over-year as of mid-August, marking a multiyear stretch of underperformance against both the broader DC metro area and the national market, which climbed 3.6% and 3% annually over the same stretch, respectively.
Sales, meanwhile, are still running about 45% below where they stood in 2021, when the market peaked.
The pain is not evenly spread. Condo-heavy pockets of Downtown, Southwest and Southeast Washington are absorbing the worst of it.
In the ZIP code covering the Southwest Waterfront, the Wharf and Buzzard Point, prices have cratered 11.5% year-over-year, wiping out nearly a third of the neighborhood’s value since its 2024 peak. The Golden Triangle and Dupont Circle area aren’t far behind, down 8.1%.
Entry-level condos and townhouses under $500,000 are getting hit hardest of all, with 45% of those listings taking a price cut and nearly 15% qualifying for Parcl’s “fire-sale” designation, roughly double the rate of any other price band.
Luxury is a different story entirely. Northwest neighborhoods like Foxhall and the Palisades have actually seen prices climb 4.6% year-over-year, and Brookland is up 5.5%, a divide that tracks with broader reporting on the resilience of DC’s high end even as the middle and bottom of the market struggle.
“DC has quickly shifted from a market where buyers felt pressure to act to one where sellers are competing for their attention,” Mark Rutstein of Compass, who has worked in the DC real estate market for nearly 25 years, told The Post.
“We’re seeing fewer showings across the board, and with high interest rates, uncertainty around the federal workforce and significant pressure on the condo market, buyers have more leverage than they’ve had in years — although well-located single-family homes and parts of the higher-end market continue to hold up better.”
One group isn’t waiting around for a rebound. Investors have ramped up their share of DC home purchases from 12.3%to 19.2% this year, scooping up 1,121 properties through July against just 840 sales, a net gain of 281 homes.
It’s the clearest sign yet that someone believes the District’s bloodletting is closer to a bottom than a bottomless pit.
Whether that bet pays off may come down to supply. Housing permits authorized in DC have collapsed 79% since 2022, from 7,705 units down to just 1,591 last year, almost entirely driven by a pullback in multifamily construction.
Fewer new units hitting the market in the years ahead could eventually give the District’s beleaguered sellers the floor they’ve been waiting for.
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