Alexandria is expected to lead other Northern Virginia localities in home-value appreciation in the coming year, with strongest growth coming in the single-family sector.
The 2026 Regional Housing Market Forecast, released yesterday (Monday), predicts “moderate” home price increases and elevated inventory throughout Northern Virginia. The report was created by the Center for Regional Analysis at George Mason University in partnership with the Northern Virginia Association of Realtors (NVAR).
Expectations for the 2026 Alexandria market include:
- Single-family homes: The median sales price is expected to rise 4.2% over the coming year, with sales up 4.5% and inventory rising 32.7% — a large jump in percentage terms but coming off a constricted inventory in 2025
- Townhouses: The median sales price is anticipated to rise 2.5%, with sales up 3.5% and inventory rising 21.9%
- Condominiums: Prices are expected to rise 1.1%, sales 4.4% and inventory 30.3%
“It’s a smaller market. There’s just not that many single-family homes available to meet demand,” said Center for Regional Analysis Director Terry Clower.
Part of what is holding back condominium costs — in Alexandria and regionally — is the higher fees being charged by condo associations, Clower said. Those increased costs reflect general inflation over the past three years, but are not expected to cause a condo catastrophe.
“This is in no way what you’d think of as a bad downturn,” Clower said. “It’s not like any real price collapse.”
While prices are still moving higher, “it’s not going to be as dramatic as we’ve seen in some years,” Clower said of 2026 increases in the single-family sector.
But post-Covid return-to-work edicts may be impacting areas outside the inner metro area and strengthening more close-in locations like Alexandria and Arlington, he said.
“There are folks that might have been thinking about farther out suburbs that have decided, nope, we’re going to keep our focus inside the Beltway,” Clower said. “That’s going to help keep those price rises going up.”
The consensus opinion for the region is “we’re moving into a market that’s more balanced” between buyers and sellers, NVAR CEO Ryan McLaughlin said during a 45-minute video presentation with industry leaders that accompanied the report.
That balance is in contrast to the immediate Covid era, when a tight inventory of homes on the market pushed prices higher across the region and frustrated would-be buyers.
The coming year should provide “arguably a healthier dynamic in the marketplace,” McLaughlin said.
His comments were echoed by 2025 NVAR president Casey Menish, who is affiliated with Pearson Smith Realty.
With a more balanced market, “you can really take the time to buy the right house, and not just jump on the first one,” Menish said.
The crystal ball used by the prognosticators was clouded by continued economic uncertainty and how impacted the local region will be by continued contraction of the federal-government workforce.
“There are a lot of things going on in the regional economy — this means we’re at a bit of a pivot point, which is always challenging for forecasters,” Clower said.
Despite economic concerns and questions around federal-government employment, 2026 may be a year where growth in personal income begins to catch up with increases in house costs.
That would provide “a chance for our area to catch up a little bit” after years of housing costs outpacing income growth, said 2026 NVAR president Rob Carney. He is affiliated with TTR Sotheby’s International Realty.
Alexandria’s projected 4.2% rate of price appreciation is highest among localities studied.
Forecasters expect it will be followed by Arlington (3.8%). Loudoun (+3.3%) and Fairfax (+1.9%) counties also should post increases. Declines are expected in Prince William (-0.2%) and Stafford (-4.6%) counties.
Interest rates are expected to hover in the 6% range for the coming year. That’s slightly lower than the longterm average but significantly higher than what buyers became used to during the early part of the pandemic.
“We’re never going to get back to the rates we had a few years ago, but there has been improvement there to help with affordability,” Carney said.
NVAR is a trade association with approximately 13,000 members across the region, dealing with both residential and commercial real estate. Year-end Northern Virginia and D.C. region sales and price figures for 2025 are expected to be released Jan. 11.
Nationally, home sales are expected to rise about 14% in 2026 and home prices to increase about 4%, according to a National Association of Realtors forecast published in November.
Lawrence Yun, the organization’s chief economist, said the expected rebound reflects easing mortgage rates, continued job gains and improving market stability after several challenging years.
“Next year is really the year that we will see a measurable increase in sales,” Yun said. “Home prices nationwide are in no danger of declining.”
Photo via Kenny Eliason/Unsplash
