Believe It? Or Not?
Doomsayers on social media say the DC housing market is crashing. Is it though?
That’s the text exchange I had with a former Wall Street colleague yesterday (I’m the one in blue). Since he and I talk politics a lot, I took my friend’s text to suggest that loads of homes are hitting the DC market because of the DOGE-related layoffs. Now I’ve been away from the investment business for a while. But because I started my career selling mortgage-backed securities, I still follow the housing market, albeit tangentially. I was surprised a development like this would’ve escaped my attention.
Rather than wait for a response, I called my friend for more information. I asked him again to point me to his source. “Just google it. It’s all over TikTok,” was his response.
This morning, I spent a few minutes trying to determine the underlying cause of what, if anything, was going on in the DC housing market. True enough, many people made variations of this housing claim. One person said the number of homes suddenly on the market had shot to 7,000. Since most of the TikTokers going on about DC cited Zillow as their source, I went to the app to check it out. My search only showed a little over 1,700 homes for sale in the immediate DC area.
A Newsweek article that dropped on Valentine’s Day entitled, “DC Housing Market in Chaos as Federal Employees Panic,” referenced a new report by Redfin “that shows uncertainty is growing in the city among buyers and homeowners.” I don’t consider growing uncertainty evidence of a sudden glut of homes for sale. And since the author didn’t provide a link to the Redfin report, or even a direct quote from (more evidence that Newsweek is a shadow of its former self), all I had to go on were a few anecdotal accounts included in the article. Nothing in the story suggested the occurrence of a recent wave of selling.
Finally, I looked at Logan Mohtashami‘s latest post on his HousingWire blog, “The impact of job cuts on the DC housing market.” He acknowledges what’s being said on social media and then presents his thesis based on inventories, pending sales, price cuts, and other factors relevant to the DC market. Feel free to give it a read but here’s the upshot (emphasis added):
Let’s examine the current state of the D.C. market and recent listing data. It appears pretty normal when compared to the last few years. Unfortunately, it seems that those promoting significant inventory surges lacked the appropriate data tools to track these trends effectively.
Jobless claims have been rising in this area over the past few weeks and we can expect a further increase due to the Trump administration’s goal of slashing federal jobs, which some have estimated at 200,000. I like to keep things straightforward: monitor jobless claims, new listing data and active inventory over the next few months and follow the data. However, nothing particularly significant has occurred yet.
Since Mohtashami frequently appears on CNBC to opine on the housing market, I consider his opinion more valuable than that of a random social media personality. According to his analysis, there doesn’t seem to be an overwhelming number of homes for sale in Washington, DC., despite what they say on social media.
That doesn’t mean it can’t happen in the future.
UPDATE: The day after this post was originally published, WUSA9, a local television station covering the metro DC area, ran the following story, which cast doubt on the housing collapse claims:
And guess what? There are federal employees in all 50 states whose jobs are being cut. It's a myth that the majority of federal workers live in the DC area. The federal government is the largest employer in the US, so all of these workers who are being fired will add greatly to the unemployment statistics in the coming months.
The same fake news story is going around about Northern VA where I live. A quick search of Zillow and MLS reveals volume is about the same as it was the month before, and the month before that, and the month before that…
It’s all just cruelty cheer-mongering against an area full of woke blue folk.