The Landlord Lens - Is DOGE Crashing The Housing Market?

Episode Date: March 24, 2025

DOGE-driven cuts to the federal workforce could fundamentally reshape Washington D.C.’s housing market.In this video, we cut through the noise. What’s actually happening to DC housing in the wake of DOGE? How serious are the job losses? And what does it mean when an agency led by Elon Musk starts pulling levers that directly impact the nation's capital?#doge #housingcrash 

Doge is tanking the DC market. I'm a little worried, and if you look at the graphs, they're sort of astonishing in their downturn. Hey guys, this is John from TurboTenant. We're here to talk about current events from the lens of the independent landlord and how it impacts them. Today we're going to talk about

how the headlines related to Doge layoffs have severely impacted the DC housing prices in that market there and what landlords should do about it. We're joined here today by Seamus. Hey, Seamus. Welcome. Hey, John. How's it going? Pretty good. You ready to talk about Doge and housing prices and stuff?

Let's do it. I really appreciate your demeanor as you're introducing that, all calm, talking about headlines of Doge. Really, you came skipping up to me with excitement and a little bit of panic that Doge is tanking the DC market. I'm a little worried. And if you look at the graphs, they're sort of astonishing in their downturn. And it's hard to find historical correlatives to the downturn. It's really hard. Yeah, you showed me the graphs, and I actually believe the graphs.

The red line, which represents this year, started on trend, right? And then it just has kept going down since February when, as related to housing prices in the area. And it's not just the D.C. market. It could be any federal worksite across the country, with which you actually live pretty close to one here in Colorado. Right near one, right near one. And so, yeah, yeah, I did have some concerns about my own house because I'm, yeah, I think three miles from the major federal office space in Colorado. So yeah, I'm a little nervous. I get it. And I know you want me to be like the Doge defender, right? But really what I was thinking and talking about is people in your situation

or individuals that are in DC what they should consider doing as a result. Okay. I appreciate the pragmatic approach. Let's do it. All right. So we've got five different buckets of people. Bucket number one, you don't live near a site. You're not planning to buy near a site or move near a site. That bucket of individuals, like and subscribe, but you can kind of take a walk. This isn't for you. And this doesn't really relate to you. And I don't think it's necessarily going to impact you. But let's get past them, right?

Bucket number two, we're going to talk about individuals who are landlords and own rental properties in this area. Gotcha. We're going to talk about individuals who own a primary residence in the area. We're going to touch on what renters should do if they're living in the area. And then number five is what should have opportunistic real estate investors that may be thinking about buying the upcoming year due with this news. Okay. Awesome. Sweet. Let's start with the landlords.

Start with the landlords. It's the best place to start. So if you're a landlord right now, housing prices are dropping, housing values, we should say, do appear to be dropping, right? We've got that marvelous graph that shows the red line from this year. And while it was following trends over the last three weeks, it just kind of kept going down. Right. Right. Yeah. And so you're watching your equity value disappear, right? Whether you're a landlord or you're talking about a primary residence, equity value is starting to disappear. But there's something else that may also go down and often does when housing prices drop, which is rent. And so if you are a landlord right now and you have a tenant, hold on to them. Okay. Because chances are market rent is actually

going to drop over the next six or so months. And so if you have a tenant right now that you can make happy and you can hold it on and resign, you may actually find yourself earning a little bit more than market rent in the near future if you don't have to go through that vacancy process again. Awesome. Okay, that makes a lot of sense. How do you hold on to them, though? Because obviously they're having the opposite incentive to move, right? Yeah, so hopefully you've already been doing the right things, taking care of the property, responding to maintenance requests and building a strong relationship with this tenant. So they're already primed to stay there. But there are a couple of things that if you're not doing, I strongly suggest starting to sprinkle in now. So one of the things that I've had a lot of success with is if you have to go over for a maintenance request, right?

Bring a little something and leave it on the counter when you leave. Last time I did that, I have a property right near a college and I have some recent college guides in there. I actually asked them when they first moved in if they had a favorite type of beer in the area. We've got lots of micro breweries here in Colorado. And they mentioned one. And so whenever I go over, I bring a six-pack when I fix the maintenance request just to make sure that they stay happy. Gotcha. So you're bad influence.

Well, it's bribing. I'm bribing them because at the end of the day, they live in one of the biggest assets I have in my life. And I want them to be happy. I want them to be respectful. And I want them to be forgiving when something that I don't control, like the water heater goes out, right? Yeah, yeah. But the reality of the situation is showing them that you're paying attention and that you appreciate the living up to their side of the bargain. It creates just a slightly better relationship between you and the tenant and hopefully puts them in a position where they'd rather stay.

Gotcha. And moving sucks. Moving's the worst, right? Nobody enjoys moving. Landlords don't enjoy moving in the turnover process. Renters don't enjoy packing up all their crap. and having to lug it across down. Yeah, hate that.

All right, what's number two? All right, we're talking about individuals whose primary residence is in these areas. That's the worst one. Well, that's like yourself and all of our viewers that actually own and live in D.C. And the reality is when your home prices drop and your equity value diminishes,

you got to hang tight and you got to be patient, right? And so if you were hoping to refinance that property, you were hoping to move out, you're kind of in a tough situation and that may be more challenging to do. One thing you can do though is historically when housing prices have dropped, the cost of construction and remodeling

has actually come down as well. So one thing you can do if there is a special project or remodel that you want to do that will take your current home and turn into your dream home, it may actually be worth investing in doing that. You're not going to see the large equity value for it immediately, but if you hang tight as the cycles go up

and prices rebound, you're going to get full credit for that. And hopefully it's a better place to live in. Yeah, that does sound good. I literally just had a conversation with this about this two days ago. But not in relation to my house may be getting a little stagnant in terms of price. Yeah. And if you think about what happened last time we saw housing boom during COVID, right, construction was impossible, right?

Long wait times, everyone that was good at it, right, was taken up and charging an arm in the leg. So now might actually be an opportunity for you to buy low from an improvement. standpoint. Gotcha. So be patient, hold tight, uh, and consider upgrading the, the house itself. That's what you need to help you stay patient longer? Absolutely. Gotcha. Go on. What's number three? All right. Three is our dear renters, right? Our dear renters. If you're a renter in one of these areas, you should have your head up, right? Looking around seeing what market rate is actually doing. One thing I think tenants fail to do or understand is that when it comes for renewal of the lease, if market rate in the area is dropping, you actually have some leverage to negotiate with your landlords.

Bring it up. I'll also point out, there's a lot of renters out there today who have not seen home prices in their area go down at any point, right? That's true. You know, if you're under 30, you've never seen that as a renter. Yeah, it's basically been up, up and up. Yeah. But there's definitely an opportunity for those of us that are no longer under 30.

Yeah. There's definitely times, especially after the great financial crisis in the 08 area where rent prices dipped quite a bit. Yeah. And where the renter actually had the leverage. And if you're in these specific areas where that becomes the situation, start talking to your landlord about it. You got a renewal coming up. Send them comps. Take a couple screenshots of Zillow, right, of Apartments.com or Realtor.com, a rent in the area and send that over their way and just say, hey, I'm looking around. I'd really love to stay here, but I don't want it to be a poor financial decision to stay here.

Yeah. How can we work on the rent when renewal comes up? Now, you have to be realistic, tenants. landlords are not going to change the rent in the middle of the lease. You committed to that lease. But it's a really good opportunity for you to have that conversation as the lease winds up. And for all the landlords out there, don't be afraid of that conversation. It's a good thing. It's always better to keep a good tenant than it is to have to go back on the market in vacancy. Yep. Especially if rent's going down anyway, right?

Absolutely. Yep. Okay. What's the next bucket? All right. Our next bucket and our last bucket is our opportunistic real estate investors. Gotcha. Right? People that maybe have been thinking about becoming a landlord or individual that are building out their portfolio, right, from one to 10 to whatever they're looking for. These areas, especially with the hysteria around them and the headlines, these areas may become really good places to actually invest. And so it's definitely worthwhile to start looking around in these specific areas, especially if you're someone living, let's say, Northern Virginia

or right outside the D.C. area where you still have really strong home values yourself. And you can start kind of driving in looking, making contact with real estate agents. because if this red line on the graph that we saw earlier keeps going down, there may be some really good opportunities to get into a market, which is relatively evergreen, meaning people are constantly moving to the D.C. area, especially as administrations change. And because of that, it's not a bad place similar to a college town to have rentals.

That makes a lot of sense. Yeah. And if you're curious, you know, what areas might, besides D.C. might be impacted by these kinds of things and are good places to invest. We'll post a couple resources in the notes underneath in the description you can take a look at. Cool. I think this was really informative, Seamus. I appreciate you getting all that stuff together.

Yeah, absolutely. I think it can be an exciting and good time for people in the real estate market to either be opportunistic or make sure to kind of button down the hatches and feel a little more prepared than hair on fire. Than hair on fire. Yeah, that was a dig at me if you didn't catch it. Cool. Okay. Thanks, Seamus.

Appreciate it. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice. Landlord better from anywhere for free at turbotenant.com.