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Market Report

Washington, D.C. Multifamily
Market Report

3Q 2023

Renter Demand Rebounds in the Nation’s Capital,
But Still Overshadowed by a Historic Supply Wave

Vacancy contracted in the second quarter. After falling to a more than two-decade low in early 2022, renter demand has improved significantly through the first half of this year. Nearly 5,000 units were taken off the market on a net basis during the opening six months of 2023, which helped bring annual net absorption back to positive territory. Metro vacancy also experienced a quarter-over-quarter decline from April to June; however, the rate was still 100 basis points above the 2019 level. Although leasing activity is recovering, the robust construction pipeline remains a headwind to rental availability. As of August, there were more than 37,000 units underway, accounting for 5.5 percent of total inventory. Areas facing heavy supply pressure include Bethesda-Chevy Chase, Central D.C., Navy Yard-Capitol South, North Arlington and Northeast D.C., as each of these submarkets are slated to gain over 2,500 units in the next two years. 

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