October 2024: REVIVE index shows Downtown, D.C. activity highest in years, despite CRE’s slump deepening

Contradictions in regional vibrancy indicators persisted in the REVIVE index’s latest results. Overall, the index declined 1.9% from the previous month to 67.7. This is 5.6% lower than this time last year.

Declining regional vibrancy continues to be driven by the region’s abundant commercial real estate market, which data shows is experiencing its most challenging circumstances in over ten years. The index’s commercial real estate subcomponent shows lower values, fewer transactions and a receding construction pipeline—resulting in its lowest reading since late 2012. Clearly, any change in trajectory sparked by lower short-term interest rates has yet to generate a recovery.

The region’s multifamily rental market is still experiencing its own challenges due to the ongoing effects of higher interest rates over the last two years. However, demand for Greater Washington apartments surged in Q3 2024 by one of its greatest increases on record. The jump was likely partially caused by yet another record achieved in Greater Washington prices, which inhibit many would-be homebuyers to opt for a rental apartment.

On the other hand, the job market remains remarkably favorable and mobility measures of residents and visitors across the region reached another post-pandemic high. In fact, mobility data shows Downtown Washington activity rebounding and improving as fast as it has in years. Almost all the improvement in regional mobility experienced this year originated from the increasingly enlivened central urban core of Washington, D.C., specifically in Downtown, East End, West End, Navy Yard, Southwest, Capitol Hill and the 14th & U corridor.