What Trump's Executive Orders Could Mean For DC-Area Housing Market
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On his first day in office, President Trump signed a number of Executive Orders aimed at federal workers -- specifically a hiring freeze likely followed by eventual cuts to the federal workforce, as well as an end to the government's remote work policy.
With these orders in mind, Bright MLS chief economist Lisa Sturtevant has published an analysis below about what these orders could mean for the local housing market.
Cuts to the federal workforce could harm the region’s housing market
If there are cuts to agency and department staff, the Washington D.C. area economy and housing market would be harder hit than any other region of the country, resulting in less spending in the economy and slower economic growth. The moves would lead more people to leave the region to seek employment elsewhere. Demand for housing in the area would cool, setting up the potential for a drop in home prices, a loss in housing equity for current homeowners, and a drop in local property tax revenue.
The end of remote work for federal workers means less housing demand further out
During the pandemic, the federal government significantly expanded remote work. Several agencies also negotiated with workers for long-term telework arrangements as part of collective bargaining agreements. President Trump’s executive order directs federal agency and department heads to require in-person work on a full-time basis. Although union organizations are set to challenge this order, the fact is that a five-day-a-week return to the office will likely have a major impact on where people will choose to live.
Since the onset of the pandemic, the strongest housing markets in the greater Washington D.C. have been in the more distant suburbs. Demand for housing in the city itself and in other close-in urban communities cooled during the height of the pandemic. The region’s suburban, single-family housing market intensified, while the condo market faltered.
If federal workers are required to be in the office five days a week, expect a resurgence of interest in homes near employment centers such as the District of Columbia and near transportation and transit. Some workers who moved further out during the pandemic will be looking to sell and move closer in once they are required to commute to the office five days a week.
Local housing markets that could benefit include parts of the District of Columbia, Alexandria and Arlington, Va., as well as close-in locations in Montgomery County, Md., and Fairfax County, Va.
Suburban housing markets where demand surged during the pandemic could weaken significantly, with a rush of inventory and falling home prices if workers move en masse to be closer to work. The local markets most at risk of a substantially weaker housing market include Frederick County, Md., and parts of Southern Maryland, as well as Fauquier and other counties in Virginia’s Piedmont region.
This article originally published at https://dc.urbanturf.com/articles/blog/what_trumps_executive_orders_could_mean_for_dc-area_housing_market/23107.
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