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Backed by steady rent growth and increased transaction volume in 2024, the Washington, D.C., multifamily market remains strong heading into 2025.
“D.C. tends to see less volatility in good times and bad,” said James Tenret, Senior Regional Sales Manager at Chase. It’s too early to determine the impact of the new administration’s policies such as return-to office mandates and resignation offers for Federal employees, he said.
Increased multifamily transactions
Multifamily transaction volume rebounded in 2024. The number of transactions inside the Beltway was up 40%, and dollar volume transacted was up 98%, according to CoStar data.
But the rebound wasn’t evenly distributed, with Prince George’s County, Md., still off more than 93% from its prior peak in 2022 and D.C. posting its highest dollar volume in nine years.
“The uptick in transaction volume was driven by a combination of factors, including motivated sellers raising liquidity or exiting the market, aggressive debt financing from the GSEs and international buyers targeting gateway markets,” Tenret said.
Despite the increase in 2024, the number of deals still remains below every other year in the past decade, according to CoStar data. Large properties and institutional sponsors played an outsized role in the market, as reflected in the larger dollar volume per transaction, Tenret said.
Strong demand for workforce housing
According to CoStar, effective multifamily rent inside the Beltway hit an all-time high at $2,173 per month in 2024.
Workforce and affordable housing remains in demand in D.C., supporting durable rents and low vacancy rates.
At 6.4%, vacancy rates for more affordable properties were notably lower compared to luxury properties’ 10.6% vacancy rates, according to CoStar.
“CPI-based formulaic calculations for the rent-controlled housing stock in D.C. and Maryland should allow for 4% to 6% rent growth on units that have embedded loss to lease,” Tenret said.
The pending legislative outcome on revisions to 2022 omnibus and the Building Energy Performance Standard Program could encourage investment in the older housing stock of D.C., as more certainty can be underwritten on effective gross income and capital expenditures.
Slowing new construction
A slowdown in groundbreakings suggests supply pressure could start to ease.
“Assuming consistent demand, landlords should have significantly better pricing power with 6,089 units expected to be delivered in 2025 and 3,955 in 2026—down materially from the 14,700 delivered in 2024,” Tenret said.
Whether you’re ready for financing or looking to streamline treasury operations, reach out to our local Washington, D.C., lending, payments and liquidity team.
JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.
