DOGE Damage Drags on in DC, Where Inequality is Widening as a Result

Harrison Beacher feels a little worried for some of his clients.

The DMV-area realtor and Washington D.C. native has worked in real estate for nearly two decades, but saw his worst two months ever in January and February of this year. Housing markets can be volatile from month to month, influenced by everything from changes in interest rates to bad weather. But in the case of Beacher’s recent slow period, the cause and effect was clear: Federal job loss and uncertainty is still upending the nation’s capital one year after the Trump administration took a sledgehammer to the federal workforce, as evidenced by growing instability for middle class would-be homeowners.

“I think it was at least six contracts that we had for potential buyers that had to cancel because of job loss, job uncertainty, or job change,” Beacher told TPM. “I have not experienced that in a two month time frame in my entire 18 years in business.”

About a year after the Department of Government Efficiency, or DOGE, led by Elon Musk, began hacking away at hundreds of federal government jobs, the hollowed-out DMV-area middle class has yet to recover and is contributing to a sluggish city housing market.

On a webpage touting President Donald Trump’s first-year accomplishments, the White House praised DOGE cuts for creating a “leaner, more effective government.”

“President Trump shrunk the federal bureaucracy by 10% in 2025, providing a much-need (sic) reduction in force following massive federal workforce expansion under [former President Joe] Biden,” the page boasts. “Government employment has not accounted for any job growth under President Trump, down from 25% under Biden.”

Middle Class Slowly Locked Out of D.C.’s Housing Market

Fall-through rates, which measure the number of pending sales that didn’t ultimately happen, were up slightly in the first 10 months of 2025 compared to the previous year, according to data from Bright MLS, a real estate research firm. 

Real-estate agent Russell Brazil can almost guarantee those fall-throughs are because of federal reductions in force, he told TPM.

“We’ve heard all kinds of stories of people being under contract, then being part of a reduction-in-force and needing the back out of that contract,” said Brazil, who presides over the local Greater Capital Area Association of Realtors (GCAAR), which operates in D.C. and Montgomery County, Maryland.

Beacher works directly with clients who are now selling — not quite under duress, he said, but with an urgency marked by a sudden, unexpected need for liquidity.

“I’ve got a bunch of folks that are save-the-world, mission-driven type people that are hurting right now,” said Beacher, “because their entire vocation and livelihood was kind of put on the chopping block in the last year. We’re seeing that, feeling that, and selling some of the properties for these folks.”

One couple in Northeast D.C., with its more affordable neighborhoods, had long-term plans to lease their condo as they worked abroad for the U.S. government, Beacher recalled. Instead, they sold last year.

“They needed the cash in their hands because their future income while they were still working abroad is uncertain, directly because of the gutting of state department programs and funding that the U.S. is spending around the world,” said Beacher, who is also president of the D.C. Association of Realtors. 

Small-time property owners in the city who might own a small multi-family home, live in a unit, and lease out the rest, are being left behind more than ever, said Brazil, who owns a brokerage specializing in supporting investors. These people typically make high-five to low-six figures, can pay their bills, and craft long-term wealth-building plans on the back of moderate property ownership. And they’re hurting.

“Federal employees or state employees or public school employees, especially dual-income houses, those are exactly the kind of people I’m talking about as those small mom-and-pop investors,” Brazil said.

Housing sales data backs up the realtors’ anecdotal accounts. 

Average days a home stayed on the market in D.C. and Montgomery County increased by 161% year over year according to a February market report from GCAAR. Increased housing supply signaled “more inventory and less competition in the region,” the report found, and the median sold price in D.C. was down more than 6% in February 2026 compared to February 2025.

$3.6 Billion in Lost Pay. $1 Billion in Lost Revenue. 30,000 Lost Jobs.

Federal work powers much of the I-95 corridor, employing residents in Maryland’s Calvert, Charles, Anne Arundel, Prince George’s, Montgomery and Baltimore counties, and northern Virginia counties, including Fairfax and Stafford. But it’s in D.C. that job loss has been most acute. The District logged the highest unemployment rate in the nation in 2025, according to the Economic Policy Institute, likely because of the high concentration of federal jobs there.

More than 30,000 people lost their federal jobs in D.C. according to a review by the D.C. Office of Revenue Analysis (ORA) of data from the federal Office of Personnel Management. That net loss decreases to about 22,350 after accounting for modest federal government rehiring. Those job cuts cost D.C. workers $3.66 billion in annual pay, an average of about $148,000 per job, the report found. About 2,000 likely government contractor positions dried up between September and November 2025, the D.C. ORA found, and the District experienced its lowest level of employment since the COVID-19 pandemic.

The city expects to collect 11.1% less in real-estate related taxes this fiscal year compared to last according to its February 2026 revenue projections. Revenue estimates from last March projected the city would lose $1 billion in revenue over four years. Prior to the pandemic, D.C. hadn’t seen downward revenue revisions that large since the 2008 global financial crisis, Fitzroy Lee, deputy chief financial officer and chief economist for the D.C. Office of the Chief Financial Officer, told TPM over the summer. 

Projections have since been revised upward by more than $250 million over four years but still reflect lower revenues. D.C.’s GDP is expected to shrink by 2.9% this year, compared to 2.5% national GDP growth. 

“D.C.’s budget is taking a significant hit, largely because federal layoffs’ impact on D.C.’s revenue,” Shira Markoff, director of economic policy at the D.C. Fiscal Policy Institute, told TPM. “This turn has severely impacted the income supports and services that help low-income residents make ends meet.”

Maryland residents haven’t been spared. In 2025, Maryland had the widest unemployment gap between Black and white residents in the nation, likely reflective of the disproportionate rate of Black people who work for the government and have relied on federal employment for steady, middle-class jobs for generations. D.C. has the nation’s second highest Black-white unemployment ratio.

Collections estimates for taxes tied to real estate transactions are down throughout the state, too, including in Anne Arundel, Calvert, Baltimore and Howard counties, which are home to many federal workers, according to a county revenue report published by the state Office of Policy Analysis in January.

Luxury Real Estate Boom Highlights Increased Inequality

But not everyone is feeling the pain.

After what he called a dismal first two months of the year, Beacher’s brokerage is on track to have one of its best March’s on record, he said. To help explain this disparity, Beacher points to a tale of two properties targeting two different demographics with two very different outcomes.

On one side was a 2,400 square foot detached four-bedroom house in Northwest D.C. Initially listed at $950,000, the home sat on the market for two-and-a-half months before the seller dropped the price by $100,000 and eventually accepted an offer about $120,000 below the initial listing price with a ton of contingencies for the buyer, a growing family. 

On the other was a larger 4-bedroom in the nearby Alexandra, Virginia burbs. Listed at just over $935,000, the home netted offers within 48 hours and came under contract to a single cash buyer who purchased the property for more than $1.1 million. It’s set to close in 10 days.

For Beacher, the tale illustrates how D.C.’s persistent inequality, which has locked lower and working-class residents out of home ownership, has now swept up a class of median income-earners who’d previously been able to access the American Dream in the city. More than ever, D.C. has become a tale of two cities. Some realtors “are having their best years ever, because they only deal in the luxury space,” said Beacher.

“For some it is actually scary,” he said. “There’s some significant dynamic changes happening in a lot of different industries … that were benchmark assumptions that made D.C. a solid investment.”

That dichotomy could be why, despite a depressed job market and economy in D.C., the metro area real-estate market is largely on track with national trends. There’s been no sign of a “localized downturn,” Lawrence Yun, the chief economist for the National Association of Realtors, told TPM.

Yun acknowledged the impact federal job cuts has had on homeowners’ personal finances.

“COVID-era home-equity gains have allowed many sellers to exit via a normal sale, and early retirement payouts have helped some homeowners cover mortgage obligations while seeking new employment,” Yun said, referencing DOGE’s “early-out” retirement program. 

DOGE also offered buyouts via its notorious “fork in the road” deferred resignation program.

“It really does come down to the percentage of government workers concentrated in the District versus the suburbs,” said Brazil. “That’s not the only factor, but I think it’s one of the largest factors.”