What’s Ahead for Real Estate in Central Virginia: Key Trends and Predictions

The past two years have been challenging for anyone involved in real estate, whether buying, selling, or working in the industry. But here’s some good news: the outlook is brightening!

 According to Lawrence Yun, Chief Economist for the National Association of REALTORS® (NAR), the worst of the recent housing struggles may be behind us. Yun shared an optimistic forecast for 2025 and 2026, predicting more homes coming on the market, rising home sales, and stabilizing mortgage rates.

Jessica Lautz, NAR’s Deputy Chief Economist, also highlighted changing buyer trends, including an increase in all-cash purchases, multigenerational households, and single buyers. Let’s explore what these trends mean for buyers and sellers in the Greater Richmond area, including urban hubs like Richmond, Henrico, and Chesterfield, as well as rural markets like Powhatan and Goochland.

Home Sales Are Expected to Increase

If you’ve been waiting for a better time to buy or sell, the market is showing signs of recovery. Yun’s data reveals that home sales are expected to rise over the next two years. In suburban areas like Henrico and Chesterfield, proximity to jobs, schools, and amenities is expected to drive strong demand. Rural markets like Powhatan and Goochland will likely see steadier growth, attracting buyers looking for larger lots, privacy, or custom homes.

Here’s what to expect:

• 2025: Home sales could increase by 9% for existing homes and 11% for new builds.

• 2026: Sales of existing homes are projected to rise by 13%, while new home sales may grow by 8%.

In Richmond specifically, the median sale price of a home recently hit $387,000, marking a 4% year-over-year increase. With affordability compared to larger metro areas, the Greater Richmond region continues to attract newcomers, keeping demand strong.

Mortgage Rates: Stabilizing but Still Impactful

Mortgage rates have been a challenge for buyers, but there’s hope they will stabilize at the lower end of their recent range. Over the next two years, rates are expected to hover between 6% and 7%. While that’s higher than the historically low rates we saw a few years ago, it’s manageable for many buyers.

For suburban buyers in Henrico and Chesterfield, this stabilization offers more predictability. Rural buyers in Powhatan and Goochland, who may be building custom homes or buying larger properties, often turn to cash transactions or specialized loans.

Even if you’re currently locked into a low-rate mortgage and hesitant to sell, life changes—like growing families, downsizing, or job relocations—may make a move worthwhile. These factors often outweigh financial hesitation tied to mortgage rates.

Home Prices: Slower, Sustainable Growth

The rapid home price increases of the past few years are expected to slow, bringing the market to a more sustainable pace. Homeowners in Central Virginia have seen significant equity gains—on average, $147,000 over the past five years. While this has been great for sellers, it’s made affordability a challenge for buyers.

Here’s what Yun predicts for the future:

• 2025: Median home prices are expected to rise by 2%, reaching approximately $410,700.

• 2026: Another 2% increase is projected, bringing the median price to $420,000.

In Richmond city, demand for urban living is expected to grow, with stable price appreciation. In rural markets like Powhatan and Goochland, larger lot sizes and new custom builds will likely keep prices climbing at a steady pace.

Who’s Buying Homes in Central Virginia?

Changing buyer demographics are shaping the local real estate market. Here are some of the key trends:

More Buyers Are Paying Cash:

Approximately 26% of home sales in the Richmond area over the past year were all-cash transactions. This is particularly common in rural areas like Powhatan and Goochland, where buyers often avoid mortgages for land or custom home purchases.

First-Time Buyers Are Older:

The median age of first-time buyers in Richmond has increased to 38 years. Many are saving longer or relying on family support to afford higher prices. In Richmond and Henrico, younger buyers are getting creative, using financial assets or gifts to secure their first homes.

Multigenerational Homes Are on the Rise:

With 17% of home sales involving multigenerational households, this trend is especially prominent in rural areas. Families are pooling resources to buy larger properties that accommodate aging parents or adult children moving back home.

Urban Living Is Gaining Popularity:

After a shift to suburban living during the pandemic, buyers are returning to Richmond city for its walkability, culture, and lifestyle. Homes in Richmond sell after an average of just 15 days on the market, highlighting strong demand.

Single Women Are Leading the Charge:

Single women now represent 24% of buyers, far outpacing single men at 11%. This trend is especially notable in Richmond, where vibrant neighborhoods attract independent buyers.

What This Means for You

Whether you’re thinking about buying or selling in Central Virginia, these trends highlight a more balanced and predictable market ahead. Here’s how you can take advantage:

For Buyers:

• Suburban markets like Chesterfield and Henrico offer excellent opportunities with access to top schools and amenities.

• If you’re seeking more space or privacy, rural areas like Powhatan and Goochland may be ideal for custom builds or larger lots.

• Keep an eye on mortgage rates and plan your budget accordingly. Rates may not drop significantly, but stabilizing rates can provide more confidence in your buying power.

For Sellers:

• If you’ve been waiting for the right time to list, the next two years could offer strong opportunities as demand picks up and home prices continue to rise.

• Highlight features like urban convenience or rural privacy to attract the right buyers.

The road ahead offers opportunities for buyers and sellers alike. Stay informed and work with a trusted real estate professional to make the most of the evolving market. If you are interested in discussing how these market trends impact YOU personally, let's connect!

Warmly, 

Jacquelyn