Northern Virginia Housing Market Shows Signs of Stability and Growth as 2025 Closes

The Resilient Northern Virginia Housing Market: A 2025 Overview

As the calendar turns to 2026, the Northern Virginia housing market has closed the year on a note of resilience and cautious optimism, highlighting a significant turning point in the local real estate landscape. According to the Northern Virginia Association of Realtors® (NVAR), the year saw a total of 16,610 units sold, marking a 1.55% increase from 2024, when 16,357 units were sold. The growth in sales is underpinned by a substantial rise in total dollar volume, which increased by over 6% to reach approximately $14.68 billion.

The trend in median sold prices saw an upward adjustment as well, with prices hitting an average of $750,000 by December, a 2.78% increase from 2024. Such figures indicate a market that is gradually recalibrating to more sustainable levels after a period of intense fluctuation. The end of the year data reflects a housing environment that is aligning itself with long-standing historical norms.

While fluctuations in prices have been observed monthly throughout the year, the overall trend has seen home values stabilizing at levels slightly above those seen in 2024. This moderation symbolizes a shift towards a more balanced market, characterized by the influx of new listings. This influx has provided buyers with a greater selection of options, thereby easing the competitive pressure that dominated previous years.

However, the Northern Virginia market faced its challenges amidst higher mortgage rates and growing affordability concerns that contributed to varying sales performances across different segments. The increase in mortgage rates has squeezed some potential buyers, leading to a longer time on the market for several homes. As these conditions unfolded, the region's real estate market appeared to be transitioning into a more balanced state, marking a crucial development for both buyers and sellers.

NVAR CEO Ryan McLaughlin emphasized the importance of this adjustment, stating, "The past twelve months reflected a period of recalibration, as conditions began aligning more closely with long-term norms. Additional listings helped ease some competitive strain, facilitating more deliberate decision-making on all sides of the transaction. These dynamics bode well, setting the stage for a steadier performance in the coming year." This sense of moderation is echoed by the performance seen in December alone, where despite mixed signals, the market held onto moderate price growth against the backdrop of tighter inventory levels.

In December 2025, the median sold price stood at $715,000, a 2.1% increase compared to the previous year. However, the average time properties spent on the market increased by nearly 30%, reflecting shifting market dynamics. Inventory showed signs of improvement with the months of supply rising to 1.04, up from 0.8 in December of 2024. Meanwhile, closed sales in December reached 1,197 units, which is a 5.2% increase year-over-year, showcasing that while the market is transitioning, it is not stagnant.

Such observations suggest careful navigation for buyers and sellers alike. President of NVAR, Rob Carney of TTR Sotheby's International Realty, commented, "December's numbers highlight a market in transition. While home prices remain above levels seen last year, the slowdown in sales activity and the rising inventory levels indicate that careful planning will be essential for those looking to engage in real estate transactions in the coming months." Despite these ongoing challenges, the outlook for home buyers in 2026 appears more favorable, with expectations set for improved conditions overall.

The balanced conditions observed in the 2025 housing market align with NVAR’s 2026 Housing Market Forecast, developed in collaboration with the George Mason University Center for Regional Analysis, which anticipates the continuation of a balanced market. As Northern Virginia moves forward, the real estate sector looks poised for growth that accommodates both buyer interests and seller returns, encouraging a renewed spirit of optimism in the local housing landscape.

In conclusion, the Northern Virginia housing market is reflecting a period of adjustment, aiming for equilibrium following tumultuous years. Prospects for 2026 appear promising, as both buyers and sellers can expect a more stable and navigable market filled with opportunities. As the community remains vigilant and proactive, the future of real estate in Northern Virginia looks set to foster growth and resilience, creating lasting value for all involved in the market.