#United States #Housing Market #Real Estate #Fairfax #Northern Virginia

Northern Virginia Housing Market Shows Early Signs of Rebalancing

The real estate scene in Northern Virginia (NOVA) is exhibiting early indicators of a market rebalancing, as the region experiences a significant increase in housing inventory. According to the Northern Virginia Association of Realtors (NVAR), these changes are influencing home prices and sales activity, diverging from the national perspective.

Recent Trends in Sales and Prices

In January 2026, the number of homes sold in Northern Virginia decreased to 786, marking a 5.6% decline compared to January 2025. In contrast, the national figures reveal a moderate decline in existing home sales, with 3.91 million units sold, down 4.4% year-on-year. This suggests that while both markets are slowing, Northern Virginia's decline is sharper, likely due to higher price points that make affordability a pressing concern for local buyers.

The median home price in Northern Virginia was recorded at $675,000 in January 2026, reflecting a drop of 1.5% from the previous year. On the other hand, the national median price rose by 0.9% to $396,800. The slight decrease in local prices signals the influence of growing inventory, which is easing some pressure that has built up over the years in the real estate market. Despite this dip, it’s important to note that home values in NOVA continue to be substantially higher than the national average, illustrating the area’s vibrant demand and robust economic fundamentals.

Inventory Growth and Market Dynamics

NOVA has experienced a notable surge in housing inventory, reaching 1,526 active listings in January 2026. This figure represents a 21.1% increase from the previous year, far surpassing the national growth rate of 3.4%, which saw a total of 1.22 million units available. The expansion of available listings in NOVA, particularly in the condominium market, where there are currently 725 active listings, gives potential buyers various options, potentially altering price trajectories in the coming months.

NVAR CEO Ryan McLaughlin attributes the stabilization in local pricing to this increased supply. He states, “When supply expands, price pressure naturally stabilizes.” This shift suggests the local market is progressing toward a healthier equilibrium.

The average home remained on the market for 42 days in January 2026, a steep increase of 35.5% compared to January 2025. Comparatively, the national average was 46 days on the market, rising 12.2% over the same period. While properties in NOVA are still selling marginally faster than the national average, the more pronounced increase locally reflects changing buyer leverage and the evolving landscape of the market.

Future Outlook

The months of supply for inventory in NOVA reached 1.11 months, up 19.9% from the previous year, against a national decrease of 5.4% to 3.7 months. Although local conditions are improving, NOVA remains significantly undersupplied, emphasizing an ongoing structural deficit that impacts long-term affordability in the area. McLaughlin noted, “While we’re seeing meaningful inventory gains, at just over one month of supply, we are still far from equilibrium.”

Conclusion

January's data reveals a developing trend within both the regional and national housing markets, where slowed sales are evident. However, Northern Virginia’s accelerated inventory growth is fueling early signs of price moderation and enhancing buyer negotiation power. As the year progresses, continued expansion in supply will play a critical role in determining if the region can achieve a lasting balance in its housing market.

The Northern Virginia Association of Realtors® continues to oversee real estate activities in Fairfax and Arlington counties, along with various towns and cities within the region, striving to support housing market stability and accessibility.