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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 Sale
1,197
Airbnb Properties
2,585
Rental Properties
5,142
Traditional Vacancy rate
6.80%
Airbnb Occupancy Rate
67.49%
Mashmeter
69.04%
Median Price
$680,103
Median Rent Price
$2,919
Price/sqft
$555
Median Days on Market
62
Price to Rent Ratio
21.0
Average Cap Rate
Airbnb
2.07%
Traditional
1.88%
Average Rental Income
Airbnb
$3,103
Traditional
$2,697
 
Median Household Income
$70,979
Population
677,427
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$1,998$2,170$2,658$4,010$4,219
Traditional$2,004$1,515$2,198$3,088$3,463
Washington, DC - Homes for Sale - Newly Listed
$280,000
MLS DCDC436434
614 PARKWOOD PLACE NE #614
Washington, DC 20019
Hillbrook
Condo/Coop
2 beds2 baths1,229 sq.ft.
CAP RATE
Trad. 2.29%Airbnb 1.89%
$315,000
MLS DCDC436442
957 RANDOLPH STREET NW #B
Washington, DC 20011
Park View
Condo/Coop
1 beds1 baths749 sq.ft.
CAP RATE
Trad. 2.48%Airbnb 2.42%
$115,000
MLS DCDC433662
3907 PENNSYLVANIA AVENUE SE #302
Washington, DC 20020
Fairfax Village
Condo/Coop
2 beds1 baths643 sq.ft.
CAP RATE
Trad. 7.05%Airbnb 7.90%
$445,000
MLS DCDC436204
1391 PENNSYLVANIA AVENUE SE #M08
Washington, DC 20003
Navy Yard
Condo/Coop
1 beds1 baths728 sq.ft.
CAP RATE
Trad. 2.24%Airbnb 2.28%
Top Performing Washington Properties
$115,000
MLS DCDC433662
3907 PENNSYLVANIA AVENUE SE #302
Washington, DC 20020
Fairfax Village
Condo/Coop
2 beds1 baths643 sq.ft.
CAP RATE
Trad. 7.05%Airbnb 7.90%
$220,000
MLS DCDC430872
940 25TH ST NW #309-S
Washington, DC 20037
West End
Condo/Coop
0 beds1 baths0 sq.ft.
CAP RATE
Trad. 4.06%Airbnb 7.73%
$299,000
MLS DCDC434942
5545 BASS PLACE SE
Washington, DC 20019
Capitol View
Single Family Residential
3 beds2 baths1,584 sq.ft.
CAP RATE
Trad. 4.36%Airbnb 7.58%
$190,000
MLS DCDC432908
3900 TUNLAW RD NW #101
Washington, DC 20007
Glover Park
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 5.06%Airbnb 7.56%
Recently Sold Homes in Washington, DC
$599,000
MLS DCDC433526
1253 16TH STREET NE
Washington, DC 20002
Carver
Multi Family
0 beds0 baths1,500 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$649,000
MLS DCDC430584
1738 - 1740 SE GAINESVILLE STREET SE
Washington, DC 20020
Woodlands
Multi Family
0 beds0 baths1,332 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$1,649,000
MLS DCDC419224
526 59TH STREET NE
Washington, DC 20019
East Corner
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$650,000
MLS DCDC431864
1216 HALF STREET SW
Washington, DC 20024
Southwest Waterfront
Multi Family
0 beds0 baths1,600 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
$375,000
MLS DCDC399212
1000 RITTENHOUSE ST NW #25
Washington, DC 20011
Brightwood
Multi Family
2 beds3 baths0 sq.ft.
CAP RATE
Trad. 3.62%Airbnb N/A
$849,000
MLS DCDC427996
4814 NEBRASKA NW
Washington, DC 20016
Wakefield
Multi Family
0 beds0 baths2,102 sq.ft.
CAP RATE
Trad. 1.88%Airbnb N/A
$849,000
MLS DCDC435760
4118 ELLICOTT ST NW
Washington, DC 20016
Tenleytown
Multi Family
0 beds0 baths1,584 sq.ft.
CAP RATE
Trad. 1.87%Airbnb N/A
$700,000
MLS DCDC422064
832 19TH NE
Washington, DC 20002
Carver
Multi Family
0 beds0 baths1,152 sq.ft.
CAP RATE
Trad. 1.52%Airbnb N/A
Homes Below Median Price in the Washington, DC Real Estate Market
$115,000
MLS DCDC433662
3907 PENNSYLVANIA AVENUE SE #302
Washington, DC 20020
Fairfax Village
Condo/Coop
2 beds1 baths643 sq.ft.
CAP RATE
Trad. 7.05%Airbnb 7.90%
$220,000
MLS DCDC430872
940 25TH ST NW #309-S
Washington, DC 20037
West End
Condo/Coop
0 beds1 baths0 sq.ft.
CAP RATE
Trad. 4.06%Airbnb 7.73%
$299,000
MLS DCDC434942
5545 BASS PLACE SE
Washington, DC 20019
Capitol View
Single Family Residential
3 beds2 baths1,584 sq.ft.
CAP RATE
Trad. 4.36%Airbnb 7.58%
$190,000
MLS DCDC432908
3900 TUNLAW RD NW #101
Washington, DC 20007
Glover Park
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 5.06%Airbnb 7.56%
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
$87 per night
Entire home/apt · 1 bed
Efficiency suite in Capitol Hill
746
$84 per night
Entire home/apt · 1 bed
Cozy Cabin in the City on Cap Hill
588
$124 per night
Entire home/apt · 2 beds
Downtown DC Private Carriage House
576
$114 per night
Entire home/apt · 1 bed
Garden Suite Efficiency
511
Washington, DC Homes for Rent
$5,200
MLS DCDC436470
$3,000
MLS DCDC436198
$5,800
MLS DCDC436022
$5,300
MLS DCDC436070
Washington, DC Open Houses
Open 2 PM to 4 PM
$445,000
MLS DCDC436204
1391 PENNSYLVANIA AVENUE SE #M08
Washington, DC 20003
Navy Yard
Condo/Coop
1 beds1 baths728 sq.ft.
CAP RATE
Trad. 2.24%Airbnb 2.28%
Open 1 PM to 4 PM
$345,000
MLS DCDC435802
2611 ADAMS MILL ROAD NW #206
Washington, DC 20009
Adams Morgan
Condo/Coop
1 beds1 baths532 sq.ft.
CAP RATE
Trad. 2.08%Airbnb 2.71%
Open 1 PM to 3 PM
$564,900
MLS DCDC436096
3000 YOST PLACE NE
Washington, DC 20018
Gateway
Single Family Residential
3 beds2 baths2,000 sq.ft.
CAP RATE
Trad. 2.44%Airbnb 1.46%
Open 1 PM to 4 PM
$649,000
MLS DCDC436156
906 JACKSON STREET NE
Washington, DC 20017
Stronghold
Single Family Residential
3 beds2 baths1,791 sq.ft.
CAP RATE
Trad. 2.13%Airbnb 1.64%
Best Washington Neighborhoods for Buying Investment Property
71%
Mashmeter
property price
$820,000
Median
cap rate
4.20%
Traditional
6.04%
Airbnb
rental income
$2,870
Traditional
$4,127
Airbnb
homes for sale
5
occupancy rate
74%
Airbnb
85%
Mashmeter
property price
$975,000
Median
cap rate
2.59%
Traditional
5.60%
Airbnb
rental income
$2,103
Traditional
$4,551
Airbnb
homes for sale
7
occupancy rate
72%
Airbnb
86%
Mashmeter
property price
$799,900
Median
cap rate
4.06%
Traditional
7.03%
Airbnb
rental income
$2,710
Traditional
$4,685
Airbnb
homes for sale
3
occupancy rate
72%
Airbnb
83%
Mashmeter
property price
$559,450
Median
cap rate
6.70%
Traditional
10.39%
Airbnb
rental income
$3,125
Traditional
$4,842
Airbnb
homes for sale
10
occupancy rate
71%
Airbnb
85%
Mashmeter
property price
$295,000
Median
cap rate
12.78%
Traditional
21.18%
Airbnb
rental income
$3,143
Traditional
$5,208
Airbnb
homes for sale
1
occupancy rate
72%
Airbnb
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