January 2025: Greater Washington Resilience Persists in Latest REVIVE Index Results

Greater Washington’s vibrancy continues to be surprisingly resilient with the latest results of the REVIVE index. The REVIVE index increased by 0.2% compared to the previous month, and is 8.4% higher than it was one year ago. Some of the results show the region benefitting from initial reductions in short-term interest rates by the Federal Reserve.

Movement around Greater Washington, as measured by anonymized cell phone data, shows a region increasingly enlivened. The latest datapoint builds on consistent improvements in regional mobility evidenced through 2024, in stark contrast to flat movement activity in 2022 and 2023. Nevertheless, the seasonal pullback in regional hotel occupancy due to colder temperatures and reduced tourism caused the “Mobility & Visitation” indicator of the REVIVE index to edge slightly lower from its post-pandemic record last month.

Another bright spot in the latest results was Greater Washington’s residential real estate, whose subcomponent of the REVIVE index inched to its highest level since mid-2022. Although residential home sales have struggled against higher interest rates, sales in November were 19% higher than one year ago as another record in single-family home prices was broken. In the region’s apartment market, data shows early indications of stabilizing prices. While these positive residential market indicators are welcome, the issue of affordability remains, and this could hamper the region’s longer-term vibrancy.

Other datapoints supporting Greater Washington’s vibrancy were evidenced in a persistently stable job market, surging legislative activity on Capitol Hill (an expected occurrence that increases every two years), and regional bank stocks which have been rebounding since mid-2024.

The largest drags on regional vibrancy continue to emanate from sluggish federal government spending and unfavorable commercial real estate trends. Datapoints in both areas deteriorated in November and may be negatively impacted by the new Presidential administration in 2025. Any significant reductions in local spending and federal employment initiated by the incoming administration might derail a nascent recovery in commercial real estate demand. There is also the risk of policies enacted that may prove inflationary. Should this come to fruition, it may affect the trajectory of expected lower interest rates, which are helping heal challenging commercial real estate dynamics.