The median sales price of Arlington single-family homes in 2025 could peak at around $1.4 million in early summer before retreating slightly, according to a new forecast.
The prediction, which also anticipates a year-over-year decline in county home sales next year, comes from the Northern Virginia Association of Realtors (NVAR) and the George Mason University Center for Regional Analysis.
The joint forecast was made public Tuesday (Dec. 17).
Inventory, while still tight, should ease slightly next year in the single-family and condominium sectors. But sky-high prices and mortgage-interest rates hovering in the range of 6% to 7% will bring affordability challenges, panelists said.
“First-time homebuyers do not have a lot of choices,” said Thai Hung Nguyen, the 2024 NVAR chair and a Realtor with Better Homes & Gardens Real Estate.
The dream of single-family housing continues to be out of reach for many in the Washington region, Nguyen said.
“Single-family homes are getting pricier and pricier,” he said, pointing to townhouses as the new “sweet spot” for many.
The median sales price for single-family homes in Arlington briefly surpassed $1.4 million earlier this year before falling back in a typical seasonal cycle. The projection for 2025 calls for the median price to approach, but not necessarily exceed, the 2024 peak.
The overall forecast for 2025 in Arlington in various market segments:
- Single-family: Sales are expected to decline 6.5% year-over-year in 2025, with median sales prices rising 5.3% and inventory growing 1.8%.
- Attached (townhouses, rowhouses): Sales are projected to decline 1.3%, prices to rise 8.1% and inventory to drop 4.3%.
- Condominiums: Sales are expected to decline 1.5%, prices to rise 1.6% and inventory to rise 3.6%.
The condominium sector, an entry point for first-time buyers and for seniors who want to downsize, will be impacted by rising condo-association fees, said Terry Clower, who heads the Center for Regional Analysis.
In some cases, condo-fee increases will be necessary to build up reserves for older complexes where major maintenance is necessary, he said.
In the broader Northern Virginia market, potential economic and political headwinds are unlikely to derail sales and price increases, according to forecasters.
That’s good news for prospective sellers but means an ongoing challenge for purchasers.
“It’s never going to be cheap to live in the national capital region. There is tremendous pent-up demand,” said Clower.
While buyers are getting used to interest rates that are higher than during the pandemic, some current homeowners remain unwilling to part with mortgage-interest rates of 3% to 4% they obtained when rates were at historic lows.
“A lot of them have been sticking it out. They like the payments,” said Casey Menish of Pearson Smith Realty, NVAR’s incoming president.
The wild card for the coming year could be the Trump administration’s plans for the federal workforce and government agencies.
“We’re keeping an eye on what those changes may be,” Menish said.
“The federal workforce is still important for us,” Clower said of the regional economy. “We don’t know how that is going to play out. We’re not in dire straits … but we have challenges.”
NVAR has 13,000 members, who in 2023 tallied $17 billion in sales volume — a total that is expected to be higher when year-end 2024 figures are reported, owing to home-value appreciation.
The National Association of Realtors also is out with its 2025 projection, which sees healthy increases in sales and modest bumps up in prices to a median $410,000 nationally for the coming year.
