The Washington, D.C., metro area real estate market is navigating an unusual combination of pressures in mid-2026. Federal workforce reductions, persistent interest rates, and geopolitical uncertainty have combined to create a market that looks and feels different from recent years. For buyers and sellers trying to time their moves, the signals can be confusing, and potentially costly if misread.
Jonathan Rundlett, Broker and Owner of EXIT Prosperity Realty, has been working through multiple market cycles in the DMV since 2005. His perspective, shaped by experience on both the mortgage and brokerage sides of the business, offers a grounded read on what is actually happening versus what the headlines suggest.
The spring market, traditionally the busiest period for residential real estate, came in softer than prior years across the DC, Maryland, and Virginia region. The primary reason, according to Rundlett, is uncertainty driven by federal workforce changes. Many government agencies have been shut down or scaled back, pushing potential buyers and sellers to the sidelines.
Elevated mortgage rates, kept high in part by the ongoing conflict with Iran, have compounded the hesitation. The result is a market where many potential participants are holding back.
Sellers, in particular, are waiting for rates to drop before listing, expecting that lower borrowing costs will attract more buyers and push prices higher. Rundlett argues this logic may backfire. If a large number of sellers list simultaneously once rates fall, the surge in inventory could actually suppress prices. “They’re better off selling their house now, while it is still a relatively hot sellers’ market,” he says.
It is a counterintuitive position, but one grounded in basic supply and demand. The DMV currently sits at roughly two months of inventory, well below the six months considered a balanced market. That dynamic still favors sellers, even if the mood feels more cautious than it did two years ago.
On the buyer side, higher rates are forcing both agents and clients to rethink how deals are structured. Rundlett, who also operates an affiliated mortgage company, Prosperity Mortgage, has been leaning on his lending background to help buyers who keep getting outbid on move-in-ready homes.
One current client had been repeatedly losing offers on updated properties. Rather than continuing down the same path, Rundlett redirected the search toward renovation financing, loan products that cover both the purchase price and improvement costs in a single package. By lowering the purchase price target and factoring in renovation costs, the buyer could end up with a home tailored to their preferences at a total cost that remained competitive.
On the seller side, assumable mortgages and subject-to transactions are also coming back into conversation. These structures allow buyers to take over a seller’s existing lower-rate loan rather than securing new financing at today’s higher rates. They were rarely discussed during the low-rate environment, but are gaining renewed relevance. “You have to continue to educate yourself and figure out different ways that you can assist your clients, because the general public is not going to know those types of creative ideas,” Rundlett notes.
Buyer selectivity has raised the bar for how homes are presented. A recent transaction Rundlett handled illustrates the difference preparation makes. He was preparing a military family’s Alexandria, Virginia, home for sale when a comparable property two doors down was listed for roughly $150,000 less. The situation threatened to anchor buyer expectations well below the seller’s target price.
His recommendation was professional staging, which the sellers initially resisted. After Rundlett pointed out the pricing pressure from the neighboring listing, they agreed. The home was listed the following day and received a full-price offer the same day it hit the market. The neighboring property remains unsold.
The pattern extends beyond this single case. In a market where buyers have more time to evaluate options, homes that are well presented and competitively priced are still moving quickly. Those who are not are sitting.
Demand across the broader DMV market is splitting along clear financial lines. Entry-level luxury properties, roughly in the range where buyers are financing at today’s rates, have slowed noticeably. The math on monthly payments is simply harder to absorb at current borrowing costs. At the upper end of the luxury market, however, cash buyers remain active and largely indifferent to rate movements, keeping that segment relatively healthy.
Perhaps more surprising is the continued strength of investor activity. Higher rates typically compress fix-and-flip margins enough to slow that segment, but Rundlett is seeing investors remain engaged. “They’re still negotiating deals that make sense for them for the profit that they need,” he says. Separately, previously overlooked neighborhoods are drawing more interest as buyers stretch their search parameters in response to limited inventory elsewhere.
The current caution among buyers and sellers has prompted some to draw comparisons to the 2007–2008 correction, but Rundlett pushes back on that framing. The underlying conditions are different: inventory remains constrained, price appreciation has continued year over year, and economists affiliated with major real estate associations are not pointing to a steep decline.
“If you wait, it’s just going to become more expensive to buy down the road,” he says. “You want to move forward when the time is right for you, not necessarily what’s going on in the market.” And if rates do eventually come down, refinancing remains an option – but buying at a lower price after values have risen is not.
For agents and investors working in the DMV, the current environment rewards preparation, financial literacy, and the ability to guide clients through uncertainty. The market has not stalled – it has become more selective, and the gap between well-positioned listings and poorly prepared ones is widening. Those who understand that distinction are still finding ways to close deals at strong prices, even in a slower-than-usual spring.
About the Expert: Jonathan Rundlett is Broker and Owner of EXIT Prosperity Realty, serving the Washington DC, Maryland, and Virginia market since 2005. He also operates an affiliated mortgage company, Prosperity Mortgage, and brings experience on both the mortgage and brokerage sides of the business.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
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