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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 Sale1,225
Airbnb Properties2,243
Rental Properties4,355
Traditional Vacancy rate8.70%
Airbnb Occupancy Rate55.64%
Mashmeter68.99%
Median Price$528,499
Median Rent Price$2,726
Price/sqft$586
Median Days on Market71
Price to Rent Ratio23.7
Average Cap Rate
Airbnb0.90%
Traditional2.48%
Average Rental Income
Airbnb$1,753
Traditional$2,086
 
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$1,225$1,311$1,640$3,040$5,231
Traditional$1,477$1,457$2,074$2,900$3,352
Washington, DC - Homes for Sale - Newly Listed
$760,000
MLS DCDC516928
631 D STREET NW #1226
Washington, DC 20004
Judiciary Square
Condo/Coop
2 beds1 baths1,140 sq.ft.
CAP RATE
Trad. 2.19%Airbnb 0.38%
$325,000
MLS DCDC514976
3900 14TH STREET NW #405
Washington, DC 20011
Crestwood
Condo/Coop
1 beds1 baths640 sq.ft.
CAP RATE
Trad. 2.01%Airbnb 2.31%
$559,000
MLS DCDC516512
88 54TH STREET SE
Washington, DC 20019
Capitol View
Single Family Residential
3 beds3 baths1,725 sq.ft.
CAP RATE
Trad. 2.40%Airbnb 0.83%
$749,000
MLS DCDC516700
1724 E STREET NE
Washington, DC 20002
Kingman Park
Townhouse
2 beds2 baths1,120 sq.ft.
CAP RATE
Trad. 1.36%Airbnb -1.18%
Top Performing Washington Properties
$650,000
MLS DCDC512048
414 ELM STREET NW
Washington, DC 20001
Ledroit Park
Townhouse
4 beds2 baths1,620 sq.ft.
CAP RATE
Trad. 4.91%Airbnb 7.46%
$269,500
MLS DCDC504526
950 25TH ST NW #N116
Washington, DC 20037
West End
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.08%Airbnb 7.14%
$269,999
MLS DCDC507034
940 25TH ST NW #716-S
Washington, DC 20037
West End
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.07%Airbnb 7.12%
$440,000
MLS DCDC509934
2223 PAYNE TERRACE SE
Washington, DC 20020
Buena Vista
Townhouse
3 beds2 baths1,388 sq.ft.
CAP RATE
Trad. 4.23%Airbnb 6.69%
Recently Sold Homes in Washington, DC
$550,000
MLS DCDC516262
408 CHAPLIN STREET SE
Washington, DC 20019
Benning Ridge
Multi Family
0 beds0 baths3,252 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$1,500,000
MLS DCDC455486
5 BARNEY CIRCLE SE
Washington, DC 20003
Barney Circle
Multi Family
0 beds0 baths3,000 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$1,220,000
MLS DCDC514092
616 M STREET NE
Washington, DC 20002
Gallaudet
Multi Family
0 beds0 baths2,396 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$1,225,000
MLS DCDC514590
625 FLORIDA AVENUE NE
Washington, DC 20002
Gallaudet
Multi Family
0 beds0 baths2,190 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
$399,900
MLS DCDC506000
3855 HALLEY TERRACE SE
Washington, DC 20032
Congress Heights
Multi Family
0 beds0 baths1,732 sq.ft.
CAP RATE
Trad. 4.11%Airbnb N/A
$1,590,000
MLS DCDC507526
5615 1ST PLACE NW
Washington, DC 20011
American University Park
Multi Family
0 beds0 baths3,216 sq.ft.
CAP RATE
Trad. 2.14%Airbnb N/A
$850,000
MLS DCDC504290
328 ELM STREET NW
Washington, DC 20001
Ledroit Park
Multi Family
0 beds0 baths1,470 sq.ft.
CAP RATE
Trad. 1.73%Airbnb N/A
$1,150,000
MLS DCDC491374
1654 AVON PL NW
Washington, DC 20007
Georgetown
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 1.66%Airbnb N/A
Homes Below Median Price in the Washington, DC Real Estate Market
$650,000
MLS DCDC512048
414 ELM STREET NW
Washington, DC 20001
Ledroit Park
Townhouse
4 beds2 baths1,620 sq.ft.
CAP RATE
Trad. 4.91%Airbnb 7.46%
$269,500
MLS DCDC504526
950 25TH ST NW #N116
Washington, DC 20037
West End
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.08%Airbnb 7.14%
$269,999
MLS DCDC507034
940 25TH ST NW #716-S
Washington, DC 20037
West End
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.07%Airbnb 7.12%
$440,000
MLS DCDC509934
2223 PAYNE TERRACE SE
Washington, DC 20020
Buena Vista
Townhouse
3 beds2 baths1,388 sq.ft.
CAP RATE
Trad. 4.23%Airbnb 6.69%
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
$102 per night
Entire home/apt · 1 bed
Cozy Cabin in the City on Cap Hill
658
$120 per night
$89 per night
Entire home/apt · 1 bed
Brand new english basement in D.C.
562
$129 per night
Entire home/apt · 2 beds
Walk2Everything Downtown Unit
522
Washington, DC Homes for Rent
$2,500
MLS DCDC516990
5708 OREGON AVENUE NW
Washington, DC
Chevy Chase
Single Family
2 beds2 baths1,300 sq.ft.
$1,700
MLS DCDC516992
$2,500
MLS DCDC517020
2428 20TH STREET NW
Washington, DC
Adams Morgan
Townhouse
2 beds1 baths2,544 sq.ft.
$1,795
MLS DCDC517030
Washington, DC Open Houses
Open 12 PM to 2 PM
$760,000
MLS DCDC516928
631 D STREET NW #1226
Washington, DC 20004
Judiciary Square
Condo/Coop
2 beds1 baths1,140 sq.ft.
CAP RATE
Trad. 2.19%Airbnb 0.38%
Open 2 PM to 4 PM
$1,250,000
MLS DCDC516734
234 14TH STREET SE
Washington, DC 20003
Barney Circle
Townhouse
4 beds4 baths2,262 sq.ft.
CAP RATE
Trad. 1.74%Airbnb -1.02%
Open 2 PM to 4 PM
$429,000
MLS DCDC516178
4101 ALBEMARLE STREET NW #311
Washington, DC 20016
Tenleytown
Condo/Coop
1 beds1 baths765 sq.ft.
CAP RATE
Trad. 2.20%Airbnb 1.41%
Open 1 PM to 3 PM
$575,000
MLS DCDC515798
1722 U STREET NW #B
Washington, DC 20009
Adams Morgan
Condo/Coop
2 beds1 baths789 sq.ft.
CAP RATE
Trad. 2.96%Airbnb 1.85%
Best Washington Neighborhoods for Buying Investment Property
75%
Mashmeter
property price
$529,000
Median
cap rate
7.25%
Traditional
10.31%
Airbnb
rental income
$3,198
Traditional
$4,545
Airbnb
homes for sale
0
occupancy rate
67%
Airbnb
85%
Mashmeter
property price
$554,900
Median
cap rate
7.00%
Traditional
8.74%
Airbnb
rental income
$3,238
Traditional
$4,042
Airbnb
homes for sale
30
occupancy rate
64%
Airbnb
87%
Mashmeter
property price
$528,000
Median
cap rate
6.26%
Traditional
9.15%
Airbnb
rental income
$2,756
Traditional
$4,027
Airbnb
homes for sale
6
occupancy rate
64%
Airbnb
72%
Mashmeter
property price
$859,500
Median
cap rate
4.16%
Traditional
5.64%
Airbnb
rental income
$2,979
Traditional
$4,043
Airbnb
homes for sale
16
occupancy rate
65%
Airbnb
85%
Mashmeter
property price
$294,493
Median
cap rate
12.53%
Traditional
16.80%
Airbnb
rental income
$3,076
Traditional
$4,124
Airbnb
homes for sale
2
occupancy rate
63%
Airbnb
All Washington Neighborhoods