Zillow's data indicates Washington DC's median home price reached $620,000 in Q3 2023, reflecting a 4.5% year-over-year increase. Inventory levels remain constrained at 1.2 months of supply, a 20% decline from 2022, while rent prices rose 3.8% annually. First-time buyers face challenges due to elevated prices but benefit from lower mortgage rates (6.5% as of Q3 2023).

The tight inventory and rising prices stem from sustained demand driven by economic resilience and limited new construction. Zillow's analysis notes that DC's job growth outpaced national averages, with 2.1% annual employment gains, attracting remote workers and inflating demand. Additionally, 65% of listings require 20% or more down payment, exacerbating affordability issues for buyers. A 12-month price appreciation of 8.2% underscores competitive market conditions, with 45% of sales occurring above list price. These trends align with the National Association of Realtors' report showing DC's 3.7% price surge in Q3 2023, outpacing the 1.8% national average. The Federal Reserve's 2023 survey also highlights that 78% of DC homeowners cite rising property taxes as a key concern, further influencing market dynamics. This combination of supply constraints, economic strength, and policy factors creates a complex environment for DC real estate.