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Market Report

Washington, D.C. Multifamily Market Report

2025 Investment Forecast

Tight Supply in Virginia’s Suburbs and Strengthening
District Office Employment Draw Investor Demand

Influx of residents spurs downtown supply surge. The metro’s job growth rate is set to align with Baltimore for the fastest among major Northeast markets this year, spurred by resilient traditionally office-using hiring that will rank second nationally in gains. This dynamic and local living costs that are lower than Boston and New York are expected to draw young adults to the metro. The influx of new residents will bolster apartment demand at an opportune time — a record 16,000 units are slated for completion in 2025. These deliveries should be largely well received, as demand from high-earning households reduced both Class A and B vacancy rates last year. Household income growth outpacing inflation may also support greater leasing demand across the market over the near term. Still, heavy development in the metro’s CBD may create some local supply pressure. Budget constraints facing necessity renters are concurrently impacting lower-tier properties in suburban Maryland, where Class C vacancy has surpassed Class B levels. Fundamentals should remain tighter in Nothern Virginia amid corporate growth and minimal supply additions. The area posted the lowest vacancy rate among the metro’s three regions last year.
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