Winter Market Update: Proactive Strategies for a Slower Washington, DC Rental Season

Embracing the Long-Term Outlook:

In the ever-changing world of real estate, it can be hard to realize profits if you’re only it for the short term. It's normal to witness fluctuations in the market, with peaks and dips along the way. By prioritizing occupied properties and adjusting strategies seasonally or yearly, investors can unlock their investments' potential. 

This means not getting attached to doing things the same way every year or always expecting a hefty rent increase. Often, the most important thing to keep your portfolio stable is minimizing vacancy, even if that means offering incentives or negotiating with tenants to keep them on track to renew their leases. Keeping a long-term perspective allows you to make wise decisions when it comes to the longevity of your rental portfolio. 

Higher Days on Market:

Adhering to national leasing trends, the Washington, DC market is currently “cool”, or experiencing longer rental vacancies and lower demand. Comparing the national trends of August 2023 to August 2022, there was a 26% increase in Days on Market, and compared to August 2021, the increase stands at 40%. When comparing these national trends to the local data within our portfolio, we have observed a similar increase of 29% in the average days on the market between August 2022 and August 2023.
Armed with this knowledge, you can prepare to be realistic when setting a listing price that will bring in applicants quickly. Keep in mind this is an average, and every neighborhood is affected a bit differently. It’s important to know which home types and neighborhoods need to be the most conservative as we move into Winter.

Lower Leads per On-Market Periods: 

Observing the decline in leads per on-market periods is a trend that demands our attention. Since November 2022, there has been a consistent decrease, with August 2023 showing a 10% decrease compared to August 2022 and a significant 22% decrease compared to August 2021.

With high competition for eyeballs on our Zillow listings, it’s important to get creative about standing out. That means optimizing your listing and considering deals that will capture the attention of prospective tenants. Starting with the basics, make sure you include as many details as possible in your rental listings. There is no reason a lead should have to call to ask if parking is available or if the unit has central heating & cooling. Visually, nothing should be left to the imagination, either. Professional photos are a must. Taking it a step further, consider narrating a video walkthrough, or, for more complex layouts, add a 3D tour. 



All of these tactics will help make your property memorable, especially if you respond quickly to any inquiries. To help capture attention, think through what you are able to offer across your portfolio. A discount for the first 6 months? Waiving a move-in fee? A free month’s rent for a move-in date within two weeks? Make sure that what you choose is competitive with comparable units in your area.

Thriving in the Winter Months:

Looking ahead to the winter season, it's important to acknowledge that the Washington, DC, leasing market is projected to remain challenging. If you have the flexibility to shift your rental to the Spring market or you can negotiate to keep current tenants in place, that’s likely a smart move. If you are stuck with vacant units in 2023 Q4/2024 Q1, don’t overestimate your returns based on the past two years of data. We are all aware of how busy the market was during the height of the COVID-19 pandemic, and that can make this tumble feel more drastic. 

The good news is DC is a fairly stable market. However, we are not immune to national trends. Realistic goals and thorough strategies are necessary as we look ahead to a downturn with no clear end in sight. As always, emphasizing a stellar rental experience and delivering well-maintained properties can attract tenants and encourage them to stay for the long term, delaying a return to the market.

For more happy home content, we suggest checking out our blog on Essential Vendors for Multi-Family Investors.