As 2025 begins, I’m finally writing again to reflect on the unexpected twists of the past year and share what we might expect in the months ahead. From the fallout of the NAR antitrust lawsuit to shifting buyer and seller dynamics and the ongoing challenges with interest rates, 2024 was a year full of surprises. Here’s a look at what defined last year and how it’s shaping the market moving forward.

The Commission Debate Headlines Promised Change, Reality Stayed the Same

The NAR lawsuit brought transparency to buyer agent commissions, placing them front and center in every transaction, literally and figuratively as it is now a term on the first page of the contract that is negotiable. Despite the headlines and widespread expectations (including my own), commissions didn’t change as dramatically as anticipated. In nearly all transactions, sellers still paid buyer agent commissions, though amounts were more frequently negotiated and slightly lower overall. This modest shift was likely influenced by a softer seller’s market, where sellers had less leverage.

Major brokerages have little intention of reducing costs for their clients. Many still require or strongly “encourage” agents to charge full commissions, often under the guise of compliance or internal pressure. Some have even spun this as an opportunity to charge higher fees on the sell side, pitching the idea that they can negotiate lower buyer commissions—which hasn’t materialized in practice. Instead of the traditional 5% split, sellers might agree to 3% upfront, with the promise (or false hope) of saving on the buyer side. In reality, many agents are sticking with traditional commission structures, a shortsighted approach in my opinion.

For us, this shift has been positive. Our fees remain well below the national and local averages, giving our clients a competitive edge. In competitive markets, our buyers can request a 1.5% commission—significantly lower than the typical 2.5%-3% seen in other offers. In less competitive situations, our buyers might request full commissions, which sellers are often willing to pay—especially when influenced by big brokerages promoting full fees—all while our clients still benefit from our industry-leading rebates.

Looking ahead, I predict more buyers will realize that signing binding contracts for 2.5%-3% commissions isn’t in their best interest, and commission rates will slowly decline. However, don’t expect the NAR and its members to make this an easy transition.

A More Balanced Market

2024 saw a return to pre-pandemic norms: homes took longer to sell, buyers regained the ability to include contingencies, and sellers had to negotiate more often. However, not all sellers succeeded. Overpriced or poorly presented homes struggled, highlighting a clear divide between the “haves” and “have-nots.” While year-end data shows a 5% price increase in our area, this is misleading. For much of the year, prices were flat or declining, with many sellers accepting lowering their price to close deals. The 5% appreciation primarily reflects a strong 4th quarter, driven by lower rates and anticipated rate cuts in the fall, which pulled buyers off the sidelines and sparked a late-year rebound in sales and prices.

Hot and Cold: How Interest Rates Ruled the 2024 Market

The market in 2024 was incredibly sensitive to interest rate fluctuations. When rates ticked up, inventory lingered, and buyer activity slowed. However, even small rate drops sparked sudden bursts of activity, with buyers rushing back into the market. This hot-and-cold dynamic often drove up prices, offsetting any perceived savings in monthly payments. Timing became critical for both buyers and sellers, more than I could have ever imagined. 

2025, What We’re Seeing: Shifting Motivations and Inventory Challenges

In early 2024, we noticed a particularly strong seller pipeline; clients planning or expressing interest in listing their homes. Compared to 2023, it felt like we were poised for a robust year of listings. A notable portion of these sellers were motivated by the flexibility of remote work, often relocating to more affordable areas or moving closer to family—continuing a trend that had been prevalent during the pandemic.

This year, however, that motivation has all but disappeared. Our seller pipeline feels more typical—or even slightly weaker—than last year. Conversations with industry peers mirror our experience: fewer sellers are coming to market, with many opting to stay put due to higher mortgage rates or uncertainty surrounding the local economy, particularly with the federal government's aggressive efforts to curb spending through DOGE initiatives.

On the buyer side, the dynamic has completely shifted. We’ve seen a noticeable surge in interest, particularly from individuals relocating to the area in response to back-to-office mandates. This trend emerged in late 2024, particularly during the third and fourth quarters, and has accelerated significantly since the election. The influx of buyers returning to the area has driven renewed demand—good news for sellers, but challenging for buyers facing increased competition.

Many of these buyers are also sellers in their respective markets, likely contributing to increased inventory and lower prices in pandemic-era boomtowns. This dynamic may fuel a broader housing decline narrative—one that Northern Virginia likely won’t share in. Instead, employment hubs like ours are poised to experience the opposite: tighter inventory, steady or rising prices, and intensified competition as demand continues to grow.

Inventory Challenges Persist

Next time you see a headline about rising inventory, consider this: much of the increase is due to homes lingering on the market or failing to sell altogether. The real issue, as echoed by industry colleagues, is that the supply of move-in-ready, well-priced homes remains critically low. While listings may appear to be up, many homes aren’t selling because they’re overpriced or don’t meet buyers’ expectations.

What to Watch in 2025

The big question for 2025 is whether inventory will improve. For now, tight supply is likely to continue supporting prices, especially if buyer demand increases. Here’s what this means for you:

  • Sellers: Pricing and presentation are crucial. In a competitive market, the homes that sell are those that stand out for the right reasons.
  • Buyers: Patience and strategy matter. Act quickly when the right opportunity arises, but avoid overpaying in a rush to outpace interest rate changes.
  • Everyone: The market is evolving. Whether you’re buying or selling, stay cautious, challenge conventional advice, and be prepared to adapt.

2025 feels like everything’s upside down—new president, DOGE slashing budgets, and a housing market that just won’t play by the rules. The world may be changing fast, but buying or selling a home is still about making smart decisions and staying calm in the chaos. We’re here to help you figure it all out, one step at a time.

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.