As 2023 draws to a close, I want to take a comprehensive look back at what happened in our Central Virginia real estate market this year. It was a year of challenges, no question. Mortgage rates climbed higher than most of us expected, affordability tightened, and inventory remained stubbornly low. But it was also a year that proved the resilience of our region, the strength of our communities, and the enduring appeal of Central Virginia as a place to live, work, and invest.
Let me walk you through the year by the numbers.
Mortgage Rates: The Defining Story of 2023
If there's one factor that defined 2023's housing market, it was mortgage rates. Here's how the year unfolded:
- January 2023: 30-year fixed rates around 6.0-6.5%. Buyers were cautiously optimistic that rates had peaked.
- Spring 2023: Rates fluctuated in the 6.0-6.8% range. The spring market was active but measured.
- Summer 2023: Rates climbed steadily, reaching 7.0% by August.
- October 2023: Rates peaked above 7.5%, the highest level since 2000. This was the moment that gave many buyers and sellers pause.
- November-December 2023: Rates eased slightly as the Fed signaled a potential shift in 2024, settling in the 7.0-7.3% range.
The rate environment created a "lock-in effect" where existing homeowners with sub-4% mortgages were reluctant to sell and trade into a 7%+ rate. This constrained inventory and kept prices stable even as demand moderated.
County-by-County Market Performance
Bedford County
| Metric | 2023 Data |
|---|---|
| Median Sale Price | $330,000 - $340,000 |
| Property Tax Rate | $0.53 per $100 |
| Days on Market (Annual Avg) | 38 days |
| Key Trend | New construction in Forest remained active; lakeside inventory stayed tight |
Bedford County continued to be the region's most in-demand market. The Forest corridor, anchored by Jefferson Forest High School's reputation and proximity to both Lynchburg and Smith Mountain Lake, maintained strong demand throughout the year. Even as rates climbed, well-priced homes in Forest's established neighborhoods and new subdivisions moved within the spring and summer selling windows.
Franklin County
| Metric | 2023 Data |
|---|---|
| Median Sale Price | $320,000 - $330,000 |
| Property Tax Rate | $0.43 per $100 |
| Days on Market (Annual Avg) | 42 days |
| Key Trend | Lowest tax rate in region attracted cost-conscious buyers; Rocky Mount saw increased activity |
Franklin County's story in 2023 was one of growing appeal. The county's $0.43 per $100 property tax rate, the lowest in the region, became an increasingly important selling point as buyers calculated their total monthly costs at higher interest rates. The south shore of Smith Mountain Lake continued to attract buyers who wanted lake access without Bedford County's premium, and Rocky Mount's revitalizing downtown drew attention from younger buyers.
Campbell County
| Metric | 2023 Data |
|---|---|
| Median Sale Price | $220,000 - $230,000 |
| Property Tax Rate | $0.73 per $100 |
| Days on Market (Annual Avg) | 41 days |
| Key Trend | First-time buyer haven; Brookville corridor remained the most active submarket |
Campbell County was the unsung hero of 2023. As rates pushed monthly payments higher across the region, Campbell County's $220,000-$230,000 median became the entry point that kept homeownership attainable for first-time buyers and young families. The Brookville area, with its 10-minute commute to Lynchburg, saw consistent demand. Altavista's ongoing revitalization also generated interest from buyers attracted to small-town living.
Amherst County
| Metric | 2023 Data |
|---|---|
| Median Sale Price | $270,000 - $280,000 |
| Property Tax Rate | $0.63 per $100 |
| Days on Market (Annual Avg) | 44 days |
| Key Trend | Remote worker demand for acreage properties; mountain view homes commanded premiums |
Amherst County's 2023 story was written by remote workers. The county's combination of affordable acreage, mountain views, and James River access drew a steady stream of buyers who could work from anywhere and chose to work from a home office overlooking the Blue Ridge. Properties with 5+ acres and views sold at premiums above the median, while Madison Heights continued to serve commuters seeking Amherst's value with Lynchburg's convenience.
Smith Mountain Lake Waterfront: The Premium Market
| Metric | 2023 Data |
|---|---|
| Median Sale Price | ~$825,000 |
| Appreciation Since 2019 | 57.1% (from ~$525,000) |
| Population Growth (SML Area) | +15.6% since 2020 |
| Key Trend | Inventory remained extremely tight; luxury segment proved rate-resilient |
Smith Mountain Lake waterfront proved once again that luxury lakefront real estate operates by different rules than the broader market. At $825,000 median, prices held firm despite the rate environment. Why? Because many SML waterfront buyers are cash or high-equity purchasers for whom interest rates are less relevant. The limited supply of waterfront (500 miles of shoreline is a fixed number) and sustained demand from migration markets kept the SML premium market healthy throughout 2023.
Where SML Buyers Came From in 2023
| Origin | % of Buyers |
|---|---|
| Northern Virginia | 21.1% |
| Richmond Metro | 12.5% |
| Raleigh-Durham, NC | 9.5% |
| Washington, DC | 8.2% |
| New York City Metro | 5.5% |
| Local/Regional | 43.2% |
The migration pattern that began during COVID continued unabated in 2023. More than half of SML buyers came from outside the immediate region, with Northern Virginia remaining the dominant feeder market at 21.1%. The combination of remote work flexibility, dramatic cost-of-living savings, and SML's natural beauty continues to draw professionals from the East Coast's major metros.
Days on Market: A Quarter-by-Quarter View
| Quarter | Avg. Days on Market | Market Conditions |
|---|---|---|
| Q1 (Jan-Mar) | 40-50 days | Winter slowdown; rate uncertainty kept some buyers sidelined |
| Q2 (Apr-Jun) | 30-40 days | Spring surge; strongest activity of the year across all counties |
| Q3 (Jul-Sep) | 35-45 days | Summer lakefront season active; rates climbing dampened inland markets |
| Q4 (Oct-Dec) | 45-55 days | Rates peaked above 7.5% in October; market slowed but didn't stall |
The seasonal pattern held true to form in 2023, with spring delivering the fastest sales and Q4 the slowest. Importantly, even at the Q4 peak of 45-55 days, we never approached the 90-120 day averages that would signal a distressed market. Central Virginia's market slowed in 2023; it did not decline.
Key Trends That Defined 2023
1. The Lock-In Effect
Homeowners with 2020-2021 mortgages at 2.75-3.5% were understandably reluctant to sell and buy at 7%+. This kept inventory low, which in turn supported prices even as demand moderated. The lock-in effect was the single biggest factor preventing a price correction.
2. Cash and High-Equity Buyers Dominated the Luxury Segment
At Smith Mountain Lake and in the $500,000+ price range across the region, cash purchases and large down payments became more common. These buyers were less sensitive to rate changes, which is why the luxury segment held up better than the entry-level market.
3. New Construction Offered Incentives
Builders in Bedford County and the Forest area offered rate buydowns, closing cost assistance, and upgrade packages that effectively reduced the buyer's cost without lowering the sale price. This was a significant shift from 2021-2022 when builders had waitlists and offered nothing.
4. Remote Work Remained a Permanent Force
The migration from NoVA, Richmond, and other metros did not reverse. If anything, it stabilized at a new normal level. Companies that called employees back to the office did so with hybrid arrangements (2-3 days per week), which is still compatible with living in Central Virginia if you're willing to make occasional drives to DC or Richmond.
5. Short-Term Rental Regulation Tightened
All three SML counties (Bedford, Franklin, and Pittsylvania) maintained or strengthened their short-term rental permit requirements in 2023. Bedford's Conditional Use Permit, Franklin's Special Use Permit and business license, and Pittsylvania's zoning permit processes all remained in place. Investors considering STR purchases needed to verify compliance before buying.
Lessons from 2023
If I had to summarize what 2023 taught us, it would be this:
- Central Virginia is resilient. Higher rates slowed the market but didn't break it. Prices held, communities grew, and the fundamental appeal of the region was undiminished.
- Affordability is relative. At a time when coastal metros became even less affordable, Central Virginia's value proposition became more compelling. A $225,000 home in Campbell County or a $335,000 home in Bedford County is genuinely attainable for working families.
- Smith Mountain Lake is a national destination. The buyer origin data makes it clear: SML competes not with other Virginia lakes but with lake markets across the Southeast. The 57.1% appreciation since 2019 reflects a fundamental repricing of what the lake is worth.
- Patience paid off for sellers. Sellers who priced correctly from day one and were patient through the rate peaks ultimately achieved strong outcomes. Those who overpriced and chased the market down did not.
- First-time buyers found a way. Through USDA loans, Virginia Housing programs, and the sheer affordability of Campbell and Amherst Counties, first-time buyers continued to achieve homeownership in Central Virginia even in the toughest rate environment in two decades.
Looking Ahead to 2024
As I write this in mid-December, the Federal Reserve has signaled potential rate cuts in 2024. If rates moderate from the 7%+ peaks to the 6-6.5% range, I expect:
- Increased buyer activity as affordability improves.
- Some loosening of the lock-in effect as the gap between existing and new rates narrows.
- Continued appreciation in the 3-5% range across most counties.
- SML waterfront prices holding steady or climbing further as migration demand persists.
- A competitive spring 2024 market, potentially the strongest since 2022.
But predictions are just predictions. What I know for certain is that Central Virginia remains one of the best places to live, invest, and raise a family in the mid-Atlantic. The mountains, the lake, the communities, and the people haven't changed. And that's what makes real estate here worth owning, in any rate environment.
Thank you for following our market updates throughout 2023. If you're thinking about buying, selling, or investing in 2024, I'd love to start that conversation now. The best time to plan is before the market heats up.
Here's to a healthy, prosperous 2024 for all of us.
Teresa Grant is the Owner and Luxury Listing Specialist at The Realty Group Team, Keller Williams. She and her team serve Central Virginia, Smith Mountain Lake, and the surrounding communities.