Every year, real estate market predictions flood the headlines, offering everything from cautious optimism to dramatic forecasts. As 2024 began, I shared my own take—rooted in on-the-ground experience and tempered by a healthy dose of skepticism. Now that the year has wrapped up, it’s time to evaluate: What did I get right, and where did l fall short? What do I think will happen in 2025?

Here’s what I anticipated: My 2024 listing pipeline was far more robust than in previous years, driven by three key seller groups—boomers finally ready to make their move, investors cashing in on gains, and those relocating out of the area. I predicted that significant rate drops were unlikely, citing the resilience of demand even at higher rates. My view was that we’d adjust to a “new normal” in mortgage rates and that 2024 would bring a more balanced market. I expected well-priced, desirable homes to appreciate in value and anticipated that savvy buyers would benefit from an influx of genuine sellers with substantial equity.

Looking back, my forecast wasn’t perfect, but I actually nailed most of it. Rates hovered in the high 6’s and peaked at 7% in May. While we saw rates drop momentarily in the second half of the year, it was brief and because of the overall “strong” economy we ended up back at 7%. I probably underestimated the strength of the middle market which still yielded multiple offers regularly. Let’s dive into the numbers to see how the 2024 real estate market performed compared to 2023, specifically in Northern Virginia.

Interest Rates and Home Prices: Resilience in the Market


In 2024, interest rates stayed high, often around 7%. This made buying less affordable but didn’t stop buyers. Many adjusted their budgets, and repeat buyers used equity from their current homes to bridge the gap.

Low inventory kept prices high, especially for move-in-ready homes at affordable price points. These homes often sold quickly and for top dollar, while properties needing work or overpriced lingered on the market.

Here’s a closer look at the monthly average sold prices for 2023 and 2024:

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Market Activity: Units Sold and Days on Market

Units Sold
While the total number of homes sold in 2024 was slightly lower than in 2023, the pace of sales was in line with more normal  market conditions. Slow winters and a strong Spring market:

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Days on Market
Homes spent less time on the market in 2024 compared to 2023. Well-priced homes, especially in desirable locations, often attracted multiple offers within days of being listed:

 

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Lessons Learned and Looking Ahead

2024 reinforced a few key lessons for navigating the Northern Virginia real estate market:

  1. Patience and Strategy Matter
    Buyers and sellers who understood the dynamics of supply and demand were rewarded. Those who acted decisively, whether purchasing or listing, often found themselves in advantageous positions. This wasn’t a market where you could overprice without consequence and buyers that tried to time the market or waited for rates to drop ended up having to compete when they might not have otherwise.

  2. The “New Normal” in Rates
    Lower interest rates aren’t on the horizon, but that doesn’t mean the market isn’t moving. Buyers have recalibrated their expectations, and sellers who offer a reasonable price and well prepared homes are rewarded.
  3. Inventory Challenges Remain
    Low inventory continues to shape the market. While some additional listings came online in 2024, the supply-demand imbalance remains a persistent challenge.

What’s Next for 2025?

Looking ahead to 2025, the market will likely stay competitive, thanks almost exclusively to the ongoing lack of inventory. Redfin released a survey last week where 30% of homeowners said they never plan on selling, with an even larger amount saying they don’t plan on selling in the near term. 

Close-in neighborhoods and commuter-friendly areas might finally see a meaningful comeback as buyers refocus on convenience and shorter commutes. Over the past four years, outer suburbs like Loudoun and Prince William County have outperformed traditionally stronger markets like Fairfax County, but that trend could start to shift.

Metro-centric condos and townhomes haven’t fully bounced back since COVID and didn’t see the same gains as their suburban counterparts. However, with more back-to-office mandates, especially for government and contractor roles, demand for lower-priced options like one- and two-bedroom condos could grow. These properties may become increasingly attractive to buyers seeking affordability without sacrificing location.

Khalil El-Ghoul

Discover our 2.25% Full Service Listings and alternative commission models for home buyers. Khalil is dedicated to guiding home buyers and sellers with expert advice and objective information. For professional real estate assistance, text Khalil at 571-235-4821 or email khalil@glasshousere.com today.