Potential economic and political headwinds are unlikely to derail sales and price increases Northern Virginia’s 2025 housing market, industry experts believe.
That’s good news for prospective sellers, but purchasers, especially first-time homebuyers, could face continued challenges, according to a 2025 housing market forecast publicly unveiled on Tuesday (Dec. 17) by George Mason University researchers and the Northern Virginia Association of Realtors (NVAR).
“It’s never going to be cheap to live in the national capital region. There is tremendous pent-up demand,” Terry Clower, who heads George Mason University’s Center for Regional Analysis, said.
For Fairfax County, increasing year-over-year sales, prices and inventory are predicted next year in all three segments of the market:
- In the single-family market, home sales are expected to rise 5.7% from 2024 figures, with median sales price up 1.5% and inventory up 3.4%.
- In the townhouse market, sales are expected to rise 2.9%, median sales prices 3.9% and inventory 6%.
- In the condominium sector, sales are expected to rise 0.9%, median sales prices 3.5% and inventory 3.6%.
Higher prices and the still-constrained inventory will be problematic for those attempting to buy into the market, forum participants said.
“First-time homebuyers do not have a lot of choices,” said 2024 NVAR chair Thai Hung Nguyen, a realtor with Better Homes & Gardens Real Estate.
The dream of single-family housing continues to be out of reach for many in the D.C. region, according to Nguyen.
“Single-family homes are getting pricier and pricier,” he said, pointing to townhouses as the new “sweet spot” for many.
While buyers are getting used to mortgage interest rates that are higher than during the pandemic, some current homeowners remain unwilling to part with 3% to 4% interest rates obtained when rates were at historic lows.
“A lot of them have been sticking it out. They like the [lower] payments,” said NVAR’s incoming president, Casey Menish of Peason Smoth Realty.
The wild card for the coming year could be the Trump administration’s plans for the federal workforce, including a potential back-to-the-office mandate and downsizing.
Menish said NVAR is “keeping an eye on what those changes may be,” while Clower noted that the federal workforce remains important to the regional economy
“We don’t know know how that is going to play out,” Clower said. “We’re not in dire straits … but we have challenges.”
NVAR has 13,000 members, who tallied $17 billion in sales volume in 2023 — a total that’s expected to rise in 2024.
The National Association of Realtors has also released its 2025 projections, which see healthy increases in sales and modest bumps up in prices to a median $410,000 nationally for the coming year.
Year ending strong for Fairfax housing market
Fairfax County’s residential real estate market had a strong November and is on the way to a potentially even more solid final month of the year, new data shows.
A total of 857 homes were sold countywide in November, according to figures reported by Bright MLS from data provided by MarketStats by ShowingTime. That’s up 16.8% from the 734 sales recorded in November 2023.
The average sales price was up 9.1% to $844,894, with increases in all three segments of the market:
- The average sales price of single-family detached homes was $1,175,870, up 9.4%
- The average sales price of attached homes (townhouses, rowhouses and condominiums) was $537,028, up 8.3%
- The average sales price of condominiums only was $437,210, up 17.8%
The median sales price of all homes that sold for the month of $705,000 was up 6.8%. The median is the point at which half of homes sell for more, half for less.
A total of 367 properties changed hands for more than $1 million during the month, including 22 for $2.5 million or more and four for more than $5 million.
The homes that were sold spent an average of 21 days on the market, up from 18 days a year before. The average sales price represented 99.2% of listing price, on par with November 2023.
Pending sales in the pipeline in November were nearly 31% higher than those reported a year ago. Those property transactions usually result in closed sales within a month or two of posting.
Figures represent most, but not all, homes on the market. All November 2024 figures are preliminary and are subject to revision.
Median rents tick up from 2023 across county
Apartment hunters across Fairfax County may be getting some seasonal deals but still are likely to be paying more than they would’ve a year ago.
Six major corridors of the county surveyed by Apartment List all posted year-over-year increases in median rental rates in November. The growth rates ranged from modest in areas like Tysons and Annandale to more robust in Reston and Centreville.
From the monthly report:
- Median rents in Annandale were $1,816 for one-bedroom units, $2,072 for two bedrooms, an increase of 2.1% from a year before
- In Centreville, median costs were $2,069/$2,403, up 11.7%
- In Fair Oaks, median rents were $2,175/$2,431, up 4.5%
- In Fairfax, median rents were $1,894/$2,167, up 5.9%
- In Herndon, median rents were $1,769/$2,123, up 3.8%
- In Reston, median rents were $2,167$2,294, up 7.5%
- In Tysons, median rents were $2,364/$2,834, up 1.7%
The median overall apartment-rental rate in the D.C. area for November was $2,163, according to Apartment List data.
Nationally, the median rent of $1,382 ($1,214 for one bedroom, $1,368 for two) fell for the fourth consecutive month.
While such declines are not unusual during the end of the year, they have been more pronounced in 2024, the analysts said:
The seasonal declines in rent prices that take place during the fall and winter have been steeper than usual and seasonal increases of the spring and summer have been more mild. As a result, apartments are on average slightly cheaper today than they were one year ago.
We are likely to see continued price dips to close out the year, as property owners offer modest discounts to fill vacancies during a time of year when fewer renters are looking to move.
Nationally, the median rental rate was down 0.6% from a year before but remained about $200 more than pre-pandemic levels.
Among 100 large urban areas ranked by Apartment List, the highest median rent for the month was found in Irvine, California, at $3,076. The lowest could be had in Wichita, Kansas, at $1,007.
