It's no secret that the first few months of 2025 have been chaotic. Between the climate emergencies, the whiplash of tariffs, and a rollercoaster of a Hollywood awards season, we could all use a deep breathand a vacation. But the change isn't over yet. Amid the slew of federal budget cuts, layoffs, and department closures, the real estate market in Washington D.C. is in a freefall, only adding to the economic uncertainty.According to data from Realtor.com, the number of for sale homes in Washington D.C. is up 56.2 percent compared to this week last year. That's a major jump. The asking prices of these homes have lowered slightly as well. In 2025 alone, the inventory of available homes in the area has also seen incremental increases. January saw a 35 percent year-over-year increase, and February continued to climb, up 41 percent from last year. Related StoriesThere's plenty of supply, but not so much demand. "The adjustment period following federal layoffs and funding cuts has likely put some Washington D.C. home searches on hold, both for those whose jobs have been directly impacted and those who may be concerned about what's ahead, and the data hints at these challenges," notes Realtor.com Chief Economist Danielle Hale. "So far, we're seeing more homes on the market, and modestly lower asking prices, but the situation continues to evolve."Some households will likely choose to leave and retire or find a job elsewhere.For the public servants affected by budget cuts, Washington D.C. has long been a professional home base, but many live in the larger Northern Virginia and Maryland suburbs. As the area with the largest percentage of federally employed workers, Hale expects the District of Columbia's real estate market will continue to feel the fallout from these cuts. Other major federal work hubs include states with the largest number of representatives and internal districts, namely California and Texas. "While I expect many households will choose to stay in the area and pivot to find new job opportunities, some will likely choose to leave and retire or find a job elsewhere," Hale says. But you can't count on anything these days, including continued decline. As the Department of Government Efficiency is slowing down their scrutiny and, in some cases, rehiring fired employees, only time will tell if the district's real estate markets will continue to drop or if they'll stabilize. Related StoryFollow House Beautiful on Instagram and TikTok.