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Q4 2025 MARKET REPORT

NORTHERN VIRGINIA, MARYLAND & WASHINGTON, D.C.

The books are now closed on 2025 Greater Washington, D.C. real estate market reflecting a market in transition and recalibration. Q4 and YOY data reveal a consistent narrative: home prices posted steady appreciation, while unit sales trailed prior levels—signaling a market defined more by pricing resilience than transaction volume. Inventory expanded across most jurisdictions, buyer urgency softened, and days on market continued to rise. Even with these shifts, prices have largely held firm in core markets, underscoring the region’s underlying economic strength and demand. As the market becomes more balanced, buyers are gaining leverage in negotiations, while sellers face a more competitive landscape than in recent years.

Northern Virginia posted a stable performance in 2025. Average home sale prices increased 5.8% in Q4 and 4.4% YTD. Unit sales were more subdued, rising 1.2% in Q4 and just 0.8% YTD. Most Northern Virginia jurisdictions delivered solid results, with Alexandria City, Arlington, and Loudoun County posting comparable gains in both average sale prices and unit sales. Fairfax County along with Prince William County showed more mixed outcomes, pairing higher appreciation with softer unit sales.

Washington, D.C. performed similarly to Northern Virginia and recorded average home sale price increases of 3.0% in Q4 and 3.7% YTD. Unit sales, however, continued to weigh on overall market performance, declining 9.8% in Q4 and 0.3% YTD. Several of the city’s more affluent areas, including Georgetown, Kalorama, Cleveland Park, and Spring Valley, experienced pronounced declines in unit sales coupled with subdued price growth. Meanwhile, Capitol Hill, Downtown, and the Southwest Waterfront posted uneven results, with fluctuations in both unit sales and price appreciation.

Predictably, Montgomery County also saw steady price appreciation accompanied by softer unit sales. Average sale prices increased 4.5% in Q4 and 3.2% YTD while transaction activity once again remained muted, rising just 0.6% in Q4 and 0.2% YTD. The Bethesda–Chevy Chase corridor delivered strong results, posting solid gains in both average home sale prices and unit sales. In contrast, Potomac, Rockville, and several outlying areas continued to experience uneven performance, with inconsistent price growth and fluctuating unit sales. Prince George’s County significantly underperformed with unit sales declining 15.6% in Q4 and 10.8% year-to-date.

Looking ahead to 2026, affordability is expected to become a bit less restrictive. The overall cost of homeownership is projected to ease as mortgage interest rates trend toward the 6% range, helping to offset modest price appreciation forecasted between 1% - 4%, depending on individual markets. Household incomes are also expected to grow at a pace slightly above inflation, providing incremental support to buyer purchasing power and renewed incentives for homeownership. Collectively, these factors will contribute to a cautiously optimistic outlook for the 2026 real estate market. Both buyers and sellers will benefit most when guided by sound strategy and realistic expectations. Here’s to a strong and productive year ahead.