Thousands of federal employees have been laid off by the Department of Government Efficiency (DOGE), a move that has upended the Washington, D.C., housing market and led to plunging home prices.

Home values in the nation's capital have sharply decreased due to widespread layoffs, causing many worried federal workers to list their properties for sale, as the Daily Mail reports.

DOGE, led by Elon Musk under the Trump administration, has recently let go thousands of federal employees in an effort to slash governmental expenses. This significant downsizing has directly impacted the local housing sector, with D.C. home prices seeing a downturn as a result.

Impact of Layoffs on House Sales

The layoffs have accelerated the influx of homes into the market, causing a dramatic drop in property values. In November, the median home price in Washington, D.C., hovered around $699,000. By February, prices had slipped by 20% to approximately $560,000, reflecting the turbulence in this sector.

Market reports indicate that nearly 8,000 homes are listed for sale in the D.C. metropolitan area, with a notable number -- almost half -- only recently hitting the market in the last month. This surge in listings has been largely attributed to federal workers, anxious about their job security, opting to sell their properties.

The uncertainty has not only influenced the volume of homes available but also the pricing structure. Higher-end homes are notably contributing to the housing supply, with substantial increases in luxury listings.

High-End Listings on the Rise

Luxury real estate appears to be flooding the market, with recent data showing 525 homes priced at $1 million or more, and approximately 44 homes listed at around $5 million. Return-to-office mandates have been a key driver behind these changes.

Stuart Naranch, a prominent real estate agent with Redfin, has highlighted that return-to-work policies are a significant factor. "I recently worked with a couple who bought their dream home with me a few years ago, but now they're considering listing because they want to be closer to public transportation," Naranch said. "They both work for the government and want a more convenient commute because they'll need to return to in-person work soon."

Additionally, departments such as the Interior, Energy, Veterans Affairs, Agriculture, and Health and Human Services have been affected. On top of this, about 9,500 federal employees received termination notices just last Friday, largely targeting probationary employees.

Broader Government Staffing Changes

The staffing adjustments are part of broader reductions championed by President Trump and Musk, designed to pare down government spending and increase efficiency. This included buyout options that 75,000 workers utilized, as well as potential plans to affect civil-service protections and freeze foreign aid.

Furthermore, attempts to dissolve certain agencies, such as USAID and the Consumer Financial Protection Bureau (CFPB), are being deliberated. The U.S. Forest Service and the National Park Service have already experienced significant layoffs.

Specifically, around 3,400 recent hires at the U.S. Forest Service and 1,000 at the National Park Service were laid off, underscoring the broad reach of these cuts. Legal challenges have arisen, which have delayed some dismissals, though the shakeup continues across various sectors.

Future Plans for Government Departments

Looking ahead, additional sectors are eyeing substantial workforce reductions. The Internal Revenue Service, for instance, anticipates laying off thousands, which could potentially interfere with the processing of tax returns during the busier filing season ahead.

Faced with restructuring, many remaining federal employees are voicing concerns over their future roles and responsibilities. Jo Chavez, a Redfin agent, shared insights from Kansas City, noting, "Since the inauguration, I've met with a few people, including one federal government employee, who are selling specifically because of anticipated return-to-office orders."

This sentiment further explains the volatile nature of the housing market as employees grapple with return-to-office orders and potential restructuring impacts on job security.

Efforts to Offset Job Losses

Efforts to mitigate the impact of job cuts are ongoing, with partial rescindments occurring for a subset of laid-off workers. For example, some layoffs within the Department of Energy, specifically 325 from the National Nuclear Security Administration (NNSA), have seen partial rescissions.

This adjustment signifies hope for some affected workers, although many challenges remain for those seeking stability and employment continuity. The evolving landscape continues to strain the housing market and complicate the lives of numerous workers.

As the changes unfold, Washington, D.C., finds itself at a unique intersection of governmental policy and personal livelihoods, with the housing market experiencing both immediate upheaval and lingering uncertainties.