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Washington DC is the capital city of the United States, located between the states of Maryland and Virginia on the northern shore of the Potomac River. With an estimated population of 711,500, Washington DC is the 20th most populous city in the US. The Washington metropolitan area is home to over 6.2 million people, making it the 6th largest metro area in the country. The DC real estate market benefits from the positive annual net migration the city experiences, which contributes to a high population growth rate. With more than 60% of the city’s residents living in rental properties rather than owning a home (according to NeighborhoodScout), Washington DC rental properties enjoy particularly high demand and occupancy rates. 

Being the seat of the US federal government, the Capital City boasts a strong and stable economy which makes for a high employment growth rate. All three branches of the federal government, the White House, the Supreme Court, and the Capitol Building are located in the city. Much of the local labor force works in federal civil service jobs, with approximately 25% of DC employees working at a federal government agency. DC hosts 176 foreign embassies, as well as the headquarters of many international organizations such as the World Bank, the International Monetary Fund, and the Pan American Health Organisation. Many other organisations such as national trade unions, lobbying groups, and various professional associations have their headquarters in and around the city. 

Tourism is the second largest industry in Washington DC. Home to the nation’s most important monuments and museums, DC is the 5th most visited city in the US. Nearly 22 million domestic tourists visited the city in 2018, generating an estimated $7.8 billion for the local economy. DC is also a center for higher education, with a number of higher learning institutions located there, including Georgetown University, George Washington University, and the American University. Other leading industries contributing to the city’s economy include healthcare, international business, public policy, scientific research, telecommunications, technology, and hospitality. Fortune Magazine’s 2018 list of the 500 largest US companies by revenue includes 15 that are based in the Washington DC area.  


The Washington DC real estate market was named as the 18th most important US Market to Watch by PWC in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. Washington DC’s position as the nation’s capital offers long-term stability and security for real estate investors, making the DC housing market one of the nation’s most desirable for real estate investment. 

Washington Realtors and Real Estate Agents


Washington  Real Estate Investment Performance
Facts and Market Trends in Washington
Homes For Sale1,406
Airbnb Properties2,620
Rental Properties4,387
Traditional Vacancy rate6.80%
Airbnb Occupancy Rate69.90%
Mashmeter69.21%
Median Price$697,016
Median Rent Price$2,948
Price/sqft$495
Median Days on Market64
Price to Rent Ratio21.3
Average Cap Rate
Airbnb2.13%
Traditional1.89%
Average Rental Income
Airbnb$3,160
Traditional$2,731
 
Median Household Income$70,979
Population677,427
Transportation in Washington
77 / 100
Very Walkable
71 / 100
Excellent Transit
67 / 100
Bikeable
Washington  Rent Prices
RENTAL STRATEGY STUDIOS 1 ROOM 2 ROOMS 3 ROOMS 4 ROOMS
Airbnb$2,112$2,099$2,869$3,790$4,194
Traditional$2,096$1,505$2,245$3,156$3,494
Washington, DC - Homes for Sale - Newly Listed
Investment Properties for Sale
$285,000
MLS DCDC450186
302 OKLAHOMA AVE NE #301
Washington, DC 20002
Kingman Park
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 2.60%Airbnb 3.26%
Investment Properties for Sale
$2,300,000
MLS DCDC449632
2130 BANCROFT PL NW
Washington, DC 20008
Kalorama
Townhouse
2 beds3 baths0 sq.ft.
CAP RATE
Trad. -0.59%Airbnb -0.86%
Investment Properties for Sale
$2,045,000
MLS DCDC450174
2800 O ST NW
Washington, DC 20007
West End
Single Family Residential
3 beds3 baths0 sq.ft.
CAP RATE
Trad. 1.08%Airbnb 1.78%
Investment Properties for Sale
$1,050,000
MLS DCDC449850
701 NW PENNSYLVANIA AVE NW #1121
Washington, DC 20004
Penn Quarter
Other
1 beds1 baths0 sq.ft.
CAP RATE
Trad. -0.10%Airbnb 0.30%
Top Performing Washington Properties
Investment Properties for Sale
$720,000
MLS DCDC445040
2201 L STREET NW #906
Washington, DC 20037
West End
Condo/Coop
3 beds2 baths1,377 sq.ft.
CAP RATE
Trad. 6.51%Airbnb 7.94%
Investment Properties for Sale
$119,000
MLS DCDC430084
1907 GOOD HOPE ROAD SE #109
Washington, DC 20020
Randle Highlands
Condo/Coop
2 beds1 baths652 sq.ft.
CAP RATE
Trad. 5.85%Airbnb 7.93%
Investment Properties for Sale
$435,000
MLS 1000269948
1841 5TH ST NW
Washington, DC 20001
Ledroit Park
Townhouse
4 beds2 baths0 sq.ft.
CAP RATE
Trad. 5.68%Airbnb 7.93%
Investment Properties for Sale
$475,000
MLS 1001585902
629 COLUMBIA ROAD NW
Washington, DC 20001
Park View
Townhouse
4 beds4 baths0 sq.ft.
CAP RATE
Trad. 4.64%Airbnb 7.75%
Recently Sold Homes in Washington, DC
Investment Properties for Sale
$725,000
MLS DCDC450478
1911 I STREET NE
Washington, DC 20002
Carver
Multi Family
0 beds0 baths2,368 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Investment Properties for Sale
$799,000
MLS DCDC436504
SE SE
Washington, DC 20020
Knox Hill
Multi Family
0 beds0 baths1,920 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Investment Properties for Sale
$765,000
MLS DCDC445054
4240 6TH STREET SE
Washington, DC 20032
Washington Highlands
Multi Family
0 beds0 baths3,238 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Investment Properties for Sale
$990,000
MLS DCDC435552
2905 FAIRLAWN AVENUE SE
Washington, DC 20019
Greenway
Multi Family
0 beds0 baths1,500 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Property Value Changes and Real Estate Appreciation in the Washington Housing Market

The Washington DC real estate market has experienced some of the highest real estate appreciation rates in the US. Since Q1 of 2000, DC properties have experienced a total appreciation of 299.65% according to NeighborhoodScout, which is an average annual home appreciation rate of 7.56%. However, it seems that home value growth is slowing down as Zillow reports that DC property values have gone up only by 0.5% over the past year. This is a good sign for those considering buying an investment property in the capital as price growth will likely slow down as well.


The Washington DC housing market is currently a hot seller’s market. Housing supply is low, while demand from homebuyers and real estate investors continues to rise as the population grows. This situation enables DC real estate investors to enjoy high real estate appreciation.

Washington, DC Top Multi Family Homes
Investment Properties for Sale
$169,000
MLS DCDC443642
721 BRANDYWINE ST SE #301
Washington, DC 20032
Washington Highlands
Multi Family
2 beds1 baths0 sq.ft.
CAP RATE
Trad. 4.75%Airbnb N/A
Investment Properties for Sale
$349,900
MLS DCDC448388
4850 JAY STREET NE
Washington, DC 20019
Deanwood
Multi Family
0 beds0 baths1,400 sq.ft.
CAP RATE
Trad. 3.25%Airbnb N/A
Investment Properties for Sale
$529,000
MLS DCDC446084
3021 4TH STREET SE
Washington, DC 20032
Congress Heights
Multi Family
0 beds0 baths2,574 sq.ft.
CAP RATE
Trad. 2.52%Airbnb N/A
Investment Properties for Sale
$615,000
MLS DCDC444480
1258 16TH STREET NE
Washington, DC 20002
Carver
Multi Family
0 beds0 baths1,500 sq.ft.
CAP RATE
Trad. 2.04%Airbnb N/A
Homes Below Median Price in the Washington, DC Real Estate Market
Investment Properties for Sale
$720,000
MLS DCDC445040
2201 L STREET NW #906
Washington, DC 20037
West End
Condo/Coop
3 beds2 baths1,377 sq.ft.
CAP RATE
Trad. 6.51%Airbnb 7.94%
Investment Properties for Sale
$119,000
MLS DCDC430084
1907 GOOD HOPE ROAD SE #109
Washington, DC 20020
Randle Highlands
Condo/Coop
2 beds1 baths652 sq.ft.
CAP RATE
Trad. 5.85%Airbnb 7.93%
Investment Properties for Sale
$435,000
MLS 1000269948
1841 5TH ST NW
Washington, DC 20001
Ledroit Park
Townhouse
4 beds2 baths0 sq.ft.
CAP RATE
Trad. 5.68%Airbnb 7.93%
Investment Properties for Sale
$475,000
MLS 1001585902
629 COLUMBIA ROAD NW
Washington, DC 20001
Park View
Townhouse
4 beds4 baths0 sq.ft.
CAP RATE
Trad. 4.64%Airbnb 7.75%
Washington Airbnb Growth and Regulations

As the Capital City is a very popular domestic and international tourist destination, the Airbnb and vacation rental industry has experienced major growth in the city in recent years. In 2018, a total of 517,500 Airbnb guests stayed at DC short-term rentals, bringing a total revenue of $96 million to the local Airbnb hosts.

In November 2018, Washington DC passed a new law setting restrictions on short-term rentals starting October 1, 2019. Under the new law, Airbnb DC hosts may only rent out their primary residence as short-term rentals, meaning that they are allowed to rent out a bedroom, basement or carriage house without limit, provided they are living in the home at the time of the guests’ stay. In the case that hosts are not present at the time of renting, the law imposes a 90-day annual cap on short-term rentals. The use of second or third non-owner occupied homes for short-term rentals is banned in the city.

In order to operate a short-term rental, Airbnb DC hosts are required to obtain a license from the city. They must also collect a 14.95% city sales tax on accommodations from guests and remit it to tax authorities. The Airbnb platform, as well as HomeAway, both collect this tax on behalf of their operators. Hosts who do not use these platforms must collect and remit the sales taxes themselves. 

There are other operational requirements for short-term rental hosts in Washington DC, such as having liability insurance and installing smoke detectors in the rental property. Anyone operating illegal short-term rentals in violation of DC Airbnb regulations risks facing civil penalties.

Washington, DC Top Airbnb Homes
Washington Airbnb
$88 per night
Entire home/apt · 1 bed
Efficiency suite in Capitol Hill
785
Washington Airbnb
$79 per night
Entire home/apt · 1 bed
Cozy Cabin in the City on Cap Hill
629
Washington Airbnb
$120 per night
Entire home/apt · 2 beds
Downtown DC Private Carriage House
585
Washington Airbnb
$114 per night
Entire home/apt · 1 bed
Garden Suite Efficiency
542
Washington, DC Homes for Rent
Investment Properties for Sale
$3,300
MLS DCDC450254
Investment Properties for Sale
$960
MLS DCDC450504
1507 28TH PLACE SE
Washington, DC
Twining
Single Family
1 beds1 baths1,280 sq.ft.
Investment Properties for Sale
$2,800
MLS DCDC448914
4004 BLAINE STREET NE
Washington, DC
Benning
Single Family
4 beds2 baths1,592 sq.ft.
Investment Properties for Sale
$3,100
MLS DCDC450490
533 PEABODY NW
Washington, DC
Manor Park
Apartment
4 beds3 baths2,000 sq.ft.
Washington, DC Open Houses
Investment Properties for Sale
Open 2 PM to 4 PM
$209,900
MLS DCDC450342
4114 DAVIS PL NW #200
Washington, DC 20007
Glover Park
Condo/Coop
0 beds1 baths0 sq.ft.
CAP RATE
Trad. 2.62%Airbnb 4.05%
Investment Properties for Sale
Open 1 PM to 4 PM
$689,900
MLS DCDC450318
1168 ABBEY PL NE #1
Washington, DC 20002
Gallaudet
Condo/Coop
2 beds3 baths0 sq.ft.
CAP RATE
Trad. 1.10%Airbnb 1.89%
Investment Properties for Sale
Open 1 PM to 4 PM
$295,000
MLS DCDC449874
520 N ST SW #S-317
Washington, DC 20024
Southwest Waterfront
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 2.44%Airbnb 5.40%
Investment Properties for Sale
Open 1 PM to 4 PM
$749,900
MLS DCDC450300
1168 ABBEY PL NE #2
Washington, DC 20002
Gallaudet
Condo/Coop
2 beds3 baths0 sq.ft.
CAP RATE
Trad. 0.94%Airbnb 1.65%
Best Washington Neighborhoods for Buying Investment Property
85%
Mashmeter
property price
$749,000
Median
cap rate
3.38%
Traditional
7.12%
Airbnb
rental income
$2,110
Traditional
$4,445
Airbnb
homes for sale
9
occupancy rate
76%
Airbnb
86%
Mashmeter
property price
$844,950
Median
cap rate
3.96%
Traditional
6.39%
Airbnb
rental income
$2,790
Traditional
$4,500
Airbnb
homes for sale
4
occupancy rate
76%
Airbnb
82%
Mashmeter
property price
$259,500
Median
cap rate
14.78%
Traditional
22.78%
Airbnb
rental income
$3,197
Traditional
$4,926
Airbnb
homes for sale
0
occupancy rate
77%
Airbnb
72%
Mashmeter
property price
$674,000
Median
cap rate
5.06%
Traditional
7.32%
Airbnb
rental income
$2,843
Traditional
$4,110
Airbnb
homes for sale
13
occupancy rate
77%
Airbnb
85%
Mashmeter
property price
$669,450
Median
cap rate
8.80%
Traditional
9.54%
Airbnb
rental income
$4,911
Traditional
$5,321
Airbnb
homes for sale
8
occupancy rate
77%
Airbnb
All Washington Neighborhoods