May 2024: Greater Washington Springs Back with Activity as Hotels Post Highest Occupancy Since 2019

Greater Washington is springing back with activity according to the latest data revealed in the REVIVE vibrancy index, but sluggish commercial real estate trends continue to loom over the region. Consequently, the REVIVE index dropped 1.1% from the previous month to a level of 62.9, maintaining a stable, but relatively muted, performance.

The Mobility and Visitation component of the REVIVE index has jumped 61% since the beginning of 2024, a sizable improvement compared to the same period in 2023 (29%). Driving the increase of this component are Greater Washington hotel occupancies that have climbed to their highest levels since 2019 and rapidly increasing movement of Greater Washington residents and visitors revealed by anonymized tracking data.

The improvement in the index’s Mobility and Visitation component is enhanced by increased vibrancy in other indicators. For example, the region’s housing market is showing greater activity with increasing home sales as well as record-high home prices, despite the challenges posed by high mortgage rates. Finally, the region’s vibrancy is benefitting from federal government legislative activity picking up on Capitol Hill, a cyclical trend seen in the second year of Congress.

On the other hand, persistently high interest rates continue to take a toll on the region’s commercial real estate market. Impaired valuations, low investment activity, and soft demand has subdued the vibrancy of a significant portion of the region’s abundant office, retail, industrial and multifamily properties. Nevertheless, the specter of lower interest rates this year offer an optimistic perspective of more favorable market conditions.