Happy New Year, friends. As we step into 2023, I know the question on everyone's mind: what's happening with interest rates, and should I still buy or sell? It's a fair question. After two years of historically low rates and a market that moved at lightning speed, the landscape has shifted. But here in Central Virginia, the fundamentals that make our region special haven't changed one bit.
Let me walk you through what I'm seeing on the ground, what the data tells us, and how you can make smart moves this year regardless of where rates land.
Where Mortgage Rates Stand Today
As of early January 2023, 30-year fixed mortgage rates are hovering in the 6% to 6.5% range. That's a significant jump from the sub-3% rates we saw in 2021, and it's understandably giving some buyers pause. The Federal Reserve's aggressive rate hikes throughout 2022 have rippled through the housing market, and most economists expect rates to fluctuate between 6% and 7.5% throughout 2023.
Here's the perspective I share with my clients: rates in the 6-7% range are historically normal. If you bought a home in the 1990s or early 2000s, you likely paid 7-8%. The pandemic-era rates were the anomaly, not the norm. And unlike many metro markets where prices have softened significantly, Central Virginia's values have held remarkably steady.
Central Virginia: A Market-by-Market Breakdown
One of the things I love about our region is that it's not one monolithic market. Each county has its own personality, price point, and opportunity. Here's where median home prices are landing as we enter 2023:
| County/Area | 2023 Projected Median | Property Tax (per $100) | Character |
|---|---|---|---|
| Bedford County | $330,000 - $340,000 | $0.53 | Lake access, top schools, new construction |
| Franklin County | $320,000 - $330,000 | $0.43 | SML south shore, rural charm, low taxes |
| Campbell County | $220,000 - $230,000 | $0.73 | Affordable, close to Lynchburg |
| Amherst County | $270,000 - $280,000 | $0.63 | Mountain views, James River, acreage |
| SML Waterfront | ~$825,000 | Varies | Luxury lakefront, strong appreciation |
Look at that range. A first-time buyer can find a solid home in Campbell County for under $230,000, while a luxury buyer can invest in SML waterfront property that has appreciated 57.1% since 2019 when the median was around $525,000. That kind of diversity in a single region is rare.
Days on Market: What to Expect
The frenzied 48-hour bidding wars of 2021 have calmed down, and honestly, that's healthy. Here's what I'm projecting for days on market throughout 2023:
- Q1 (January - March): 40-50 days. Winter is always slower, and buyers are adjusting to rates. Sellers, be patient and price correctly from day one.
- Q2 (April - June): 30-40 days. Spring brings our strongest activity. Well-priced homes in Forest, Moneta, and Lynchburg's Rivermont district will move faster.
- Q3 (July - September): 35-45 days. Summer is prime lakefront season. SML properties tend to generate the most interest from Memorial Day through Labor Day.
- Q4 (October - December): 45-55 days. Rates may peak in fall, and holiday schedules slow things down. But serious buyers are out there, and less competition means better negotiating position.
The Remote Work Factor
If there's one trend that continues to reshape our market, it's remote work. The pandemic proved that professionals don't need to sit in a Northern Virginia or DC office five days a week, and many of them discovered Central Virginia as a result. We're seeing buyers from NoVA, Richmond, and even the Raleigh-Durham area choosing our region for its quality of life, lower cost of living, and natural beauty.
I'll be writing more about this migration trend in an upcoming post, but here's the headline: these aren't tourists. They're families putting down roots, enrolling kids in Jefferson Forest High School and Brookville Middle School, joining the Smith Mountain Lake Association, and becoming part of our community.
Advice for 2023 Buyers
If you're thinking about buying this year, here's my honest guidance:
- Don't try to time rates. Nobody predicted 3% rates in 2020, and nobody can tell you exactly where rates will be in June. Buy when your life situation is right, and refinance later if rates drop.
- Get pre-approved early. In a market where every dollar of purchasing power matters, know your numbers before you start shopping. I work with several excellent local lenders who understand our market.
- Consider Campbell and Amherst Counties. With medians of $220,000-$230,000 and $270,000-$280,000 respectively, these counties offer incredible value. You're 15-20 minutes from Lynchburg's employers like Centra Health, Liberty University, and BWX Technologies.
- Look at new construction in Bedford County. Builders are offering rate buydowns and incentives that weren't on the table during the frenzy. Subdivisions near Forest are particularly active.
- For lakefront buyers: SML waterfront at $825,000 median is significant, but the appreciation trend is powerful. Properties that sold for $525,000 in 2019 are now pushing well past $800,000. If lakefront living is your dream, waiting may cost more than today's rates.
Advice for 2023 Sellers
If you're considering selling, the market is still in your favor, but the rules have changed:
- Pricing matters more than ever. Overpriced homes sit. The days of listing high and letting multiple offers push you up are largely behind us. Work with an agent who knows the comps and will be honest with you.
- Condition counts. Buyers who are paying 6-7% interest are going to be more selective. Fresh paint, updated kitchens, and move-in-ready condition command premiums.
- Staging and photography are non-negotiable. In a market where online impressions drive showings, professional photos and thoughtful staging separate your listing from the pack.
- Be flexible on terms. Offering to cover closing costs or buy down the buyer's rate can make your property stand out without reducing your sale price.
Smith Mountain Lake: Still the Crown Jewel
I live at Smith Mountain Lake, and I can tell you firsthand that demand for lakefront property hasn't softened. The combination of stunning natural beauty, a thriving community around Westlake, Hales Ford Bridge, and communities like The Waterfront, Mariner's Landing, and Bernard's Landing continues to draw buyers from across the Eastern Seaboard.
The 57.1% appreciation in waterfront median prices since 2019 tells a clear story: Smith Mountain Lake is not just a lifestyle purchase, it's a sound investment. And with the lake's proximity to Roanoke (30 minutes), Lynchburg (45 minutes), and the Blue Ridge Parkway, it offers a lifestyle that's genuinely hard to replicate.
Looking Ahead
I'll be sharing market updates, area guides, and buyer tips throughout 2023. Whether you're a first-time buyer exploring Campbell County, a remote worker considering a move from Northern Virginia, or a luxury buyer eyeing a Smith Mountain Lake estate, our team is here to guide you every step of the way.
The market has shifted, but opportunity hasn't disappeared. It's just moved. And in Central Virginia, I believe the opportunities are better than most people realize.
If you have questions about buying, selling, or investing in Central Virginia real estate in 2023, don't hesitate to reach out. I'd love to have a conversation about your goals.
Teresa Grant is the Owner and Luxury Listing Specialist at The Realty Group Team, Keller Williams. She has been helping families find their perfect Central Virginia home for over two decades.