The DMV (& National) Real Estate Market: A Circulation Problem
June 1, 2026
June 1, 2026
A healthy economy is a living system and, like a living body, it depends on circulation. When liquidity flows freely, communities grow, wealth is transferred, neighborhoods renew, and life moves forward. When it dries up, things start to break.
That's the story of the local housing market over the past 3½ years. As the charts below show, both nationally and here in the DMV, transaction volume remains more than 20% below historical norms — a third consecutive year of sub-par circulation. Part of this reflects a natural hangover: COVID pulled millions of housing decisions forward, and markets need time to renormalize. But we are well past that reset.
What's keeping the market frozen now is a self-reinforcing lock-in trap. Homeowners sitting on 3% mortgages have little reason to move and, with rates once again rising and approaching 7%, trading up often means a 40–50% jump in monthly payments on a comparable home. So sellers stay put, inventory remains thin, and would-be buyers (particularly first-timers) find the entry point out of reach. Each group is waiting on the other to move first. The result is poor circulation and an economy operating below par.
The good news for home owners, for the most part, is that pricing is holding steady. Unfortunately, that is not true for condo home owners. Across the DC Metro, condo sales are down 22% year-over-year while inventory has surged nearly 60%, driven by rising HOA costs, shifting post-COVID demand, and heightened scrutiny of building finances (Bright MLS / Eli Residential, 2026). The twin pressures of frozen liquidity and disproportionate local job insecurity (DOGE, government shutdowns, AI displacement, etc.) have hit the condo market especially hard, and in DC proper, where condos represent roughly half of all housing inventory, feels it more than most.
The May 2026 National Market Insights Report is now available, with data analyzed by Mike Simonsen, Chief Economist at Compass.
Stay up to date on the latest real estate trends.
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Wydler Brothers have been selling residential real estate for over 20 years in the DC metro area. Along the way, they’ve achieved numerous awards and recognitions, including being recognized as “The Most Innovative Real Estate Agent in America” (Inman, 2014), written several articles for The Washington Post, authored a book, “Inside the Sell”, co-founded a real estate tech company which sold to Move, Inc. in 2013, and built Wydler Brothers into a highly respected boutique brokerage with 70 agents and employees which they sold to Compass in 2019. Currently, Wydler Brothers is among the top 3 teams in the DMV and was the #1 Compass Team in 2022.
