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Market Report

Washington, D.C. Multifamily
Market Report

2025 Investment Forecast

Nationally Strong Labor Market and Low-
Vacancy Suburbs Attract Investors

Affluent earners sustain demand for luxury apartments. The metro will tie with Baltimore for the Northeast’s fastest-growing labor market this year, driven by strong professional services hiring, as office-sector job gains are forecast to rank second nationally. This dynamic, coupled with local living costs lower than Boston and New York, is 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 generally 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. Concurrently, necessity renters facing budget constraints are impacting lower-tier property performance in suburban Maryland, where Class C vacancy is now higher than the Class B rate. In contrast, fundamentals should remain tight in Nothern Virginia amid corporate growth and modest supply additions. The area posted the lowest vacancy rate of the metro’s three regions last year.

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