March 2025: Subtly Improving Commercial Real Estate Dynamics Boost REVIVE Index

The Greater Washington REVIVE Index advanced 1.3% in January from the previous month to 74.0—14.5% higher than this time in 2024. The recent performance reflects a larger trend of improving datapoints since the REVIVE index reached a post-pandemic trough in February 2024. Since then, the Federal Reserve led short-term interest rates lower and the real estate sector began to show improvement, especially over the last six months.

The commercial real estate subcomposite of the REVIVE index has risen 16% over the last year as subtle improvements in sales activity and prices emerged in the region’s industrial warehouses, retail shopping centers, hotels, and even offices. Despite this progress, the commercial real estate subcomposite index remains roughly 20% below its peak achieved in August 2022, underscoring the early and fragile nature of the sector’s recovery, particularly in light of the new administration’s pursuit of aggressive cutbacks in federal government employment and real estate.

Residential real estate has also improved, helping boost the overall REVIVE score. For example, in 2024 the region’s apartment market posted its second-highest year for demand on record. The average home price continued to soar higher, and even home sales showed modest improvement.

There were some weakening signals in January’s data. Notably, the labor market remains less robust than it was a year ago, particularly in the District of Columbia where the latest data shows lower job hiring and openings. After a year of impressive growth, the data on the mobility of residents and visitors around the region finally showed a decline, which was not entirely surprising given the harsh winter weather.

Although the REVIVE’s performance continued to exceed expectations through January, it is apparent the initiatives brought about by the Trump administration are making an impact on Greater Washington and will likely influence momentum of the index in future months.

We will continue to monitor Greater Washington’s vibrancy closely as 2025 develops.