As 2025 winds down, it's time to do what I do every December: look at the numbers, assess what happened, acknowledge what I got right and wrong in my forecast, and give you an honest preview of what I see coming in 2026.
I'm Teresa Grant, and this has been my 20th year selling real estate in Central Virginia. Every year teaches me something new about this market, and 2025 was no exception. Let's dig in.
The Big Picture: 2025 in One Paragraph
Central Virginia's real estate market in 2025 was defined by resilient prices, stubborn inventory constraints, and a mortgage rate environment that refused to cooperate with wishful thinking. Rates hovered between 6.5% and 7.2% for most of the year, never delivering the dramatic drops that some forecasters predicted. Prices appreciated 3-6% across most of the region, driven by constrained supply rather than speculative demand. And the Caesars Virginia effect continued to reshape the Danville-Pittsylvania corridor into one of the most dynamic real estate stories in the state.
How My January Predictions Held Up
In January, I published my 2025 forecast. Here's how it played out:
| Prediction | What I Said | What Happened | Grade |
|---|---|---|---|
| Prices | 3-6% appreciation regionwide | 3-5% in most counties, 6%+ in Bedford/Pittsylvania | A |
| Mortgage Rates | Gradual drift toward mid-6% by year-end | Rates remained higher than expected, settling around 6.5-6.8% in Q4 | B |
| Inventory | 10-15% more listings than 2024 | Roughly 8-12% increase, still well below historical norms | B+ |
| Best Value Plays | Pittsylvania, Campbell, Appomattox | Pittsylvania was the standout; Campbell solid; Appomattox quiet | B+ |
| SML Waterfront | $850K+ median by year-end | On track, with strong Q2-Q3 sales pulling the median up | A- |
I'll give myself a solid B+ overall. The price and SML predictions were on target. I was slightly optimistic on rates (I thought we'd see mid-6s sooner) and slightly optimistic on inventory improvement (the rate-lock effect remained stronger than I expected). The Pittsylvania County call was spot-on.
County-by-County Performance
| Area | 2025 Median (Estimated) | Year-Over-Year Change | Tax Rate (per $100) | Key Driver |
|---|---|---|---|---|
| Bedford County | $385,000 | +5% | $0.53 | SML waterfront, Forest schools |
| Franklin County | $330,000 | +4% | $0.43 | SML south shore, low taxes |
| Roanoke City | $295,000 | +4% | Varies | Urban demand, remote workers |
| Lynchburg City | $280,000 | +3% | Varies | Steady fundamentals |
| Campbell County | $270,000 | +3% | $0.73 | Lynchburg proximity, affordability |
| Amherst County | $255,000 | +3% | $0.63 | Scenic appeal, entry-level pricing |
| Pittsylvania County | $250,000 | +6% | $0.63 | Caesars Virginia employment |
| Appomattox County | $240,000 | +2% | $0.43 | Rural affordability |
| Nelson County | $325,000 | +4% | $0.63 | Wine/brewery corridor, scenic beauty |
| SML Waterfront | $850,000+ | +5-7% | $0.53 / $0.43 | Finite shoreline, strong demand |
Bedford County and Pittsylvania County were the year's top performers, but for very different reasons. Bedford was driven by the continued strength of Smith Mountain Lake's waterfront market and the desirability of the Forest school corridor. Pittsylvania was driven by the Caesars Virginia employment effect, with casino workers and supporting businesses creating sustained housing demand in a market that was previously undervalued.
The Rate Story of 2025
If 2025 had a soundtrack, it would be the sound of buyers waiting for rate drops that never quite arrived. The year started with rates around 6.9% to 7.2%, and while they did gradually ease, the mid-6% range didn't arrive until late in the year, and even then only briefly.
The Federal Reserve cut rates cautiously, and the bond market -- which actually determines mortgage rates -- remained skeptical about inflation. The result was a year where rates stayed in the upper-6s for longer than most economists predicted.
What this meant for our market: buyers who stopped waiting and bought earlier in the year generally did well. A buyer who purchased a $380,000 home in Bedford County in March at 7.0% and refinances when rates eventually hit 6.0% would save about $240 per month. But that same buyer gained roughly $19,000 in equity from the year's 5% appreciation. Waiting for the "perfect" rate while prices climbed was, once again, the wrong strategy.
The Caesars Virginia Update
The full resort completed its first full calendar year of operations in 2025, and the real estate impact has exceeded most projections:
- Employment: Over 1,300 permanent positions filled, with additional contract and seasonal workers.
- Visitation: Millions of visitors passed through the resort, supporting restaurants, shops, gas stations, and short-term rentals across the region.
- Housing demand: Rental occupancy in Pittsylvania County climbed, rents increased 10-15%, and home sales to relocating workers were a consistent factor throughout the year.
- Investor activity: Smart investors who positioned in 2023-2024 are seeing strong returns. Properties purchased for $180,000-$220,000 are generating $1,100-$1,300/month in rental income with sub-$1,500 annual property taxes.
The Danville corridor is no longer an "emerging" story. It's an established one, and the properties closest to the resort have already seen meaningful appreciation.
Population and Migration Trends
Central Virginia continued to benefit from steady inbound migration in 2025. The pattern we've seen since 2020 held firm: remote workers from the DC, New York, and Philadelphia metros choosing Central Virginia for quality of life; retirees from the Northeast cashing out high-equity homes for more house and lower taxes; and Caesars-driven relocations to the Danville area.
Bedford County's population grew past 80,600 (continuing its 1.6% growth trajectory), and Franklin County hit approximately 51,800 (also 1.6% growth). These are modest numbers individually, but they represent sustained, organic demand that supports property values without creating the kind of speculative pressure that leads to corrections.
Seasonal Patterns Held True
The seasonal rhythm I track every year held consistent in 2025:
- January: Slowest month. Average days on market hit 45, prices at annual low. Buyers who purchased in January got the best negotiating leverage of the year.
- Spring (March-May): The market woke up on schedule. A 5-7% price premium over winter listings materialized, and well-priced homes in Forest and South Roanoke moved in under 25 days.
- June: Peak month. Highest prices, fastest sales (averaging 25 days on market). Sellers who listed in late May and early June maximized their returns.
- Fall: A solid second window. September and October saw a mini-surge from buyers trying to close before the holidays.
- December: Slowdown. But motivated sellers in December offer opportunities for savvy buyers heading into January.
What I Got Wrong
I believe in accountability, so here's what I missed:
- I expected rates to reach the mid-6% range by summer. They didn't get there until late fall, and even then only briefly. The Fed was more cautious than I anticipated.
- I expected Appomattox County to perform better than it did. While it appreciated modestly, it didn't see the buyer interest I predicted. The distance from major employment centers continues to limit its appeal.
- I underestimated how persistent the rate-lock effect would be. Even with life events forcing some sellers to market, the total impact on inventory was less than I hoped.
Looking Ahead: 2026 Preview
I'll publish my full 2026 forecast in January, but here are the themes I'm watching:
- Rates: I expect a gradual decline into the low-to-mid 6% range over the course of 2026, which should provide some relief for buyers and potentially unlock more inventory as the rate-lock effect slowly eases.
- Prices: Another year of 3-5% appreciation across most of Central Virginia. The fundamental drivers -- limited supply, steady demand, population growth, and low property taxes -- remain intact.
- Inventory: Slowly improving but not dramatically. We need rates in the low 5s before the rate-lock effect meaningfully releases, and that's not a 2026 event.
- SML waterfront: Continued appreciation. Finite shoreline plus growing demand equals higher prices. This equation doesn't change.
- Danville/Pittsylvania: The second full year of the Caesars resort will bring continued employment growth, expanded vendor networks, and further real estate demand.
- Remote work: The trend is permanent. Central Virginia's combination of natural beauty, affordability, and improving broadband infrastructure will continue to attract location-independent workers.
A Personal Reflection
Twenty years. Over 1,300 closings. More than $343 million in career volume. And I still get excited when I hand someone their keys for the first time. I still feel it when a retired couple from New Jersey walks into a Smith Mountain Lake waterfront home and tears up because they can't believe this is really theirs. I still love the moment when a young family realizes they can afford the four-bedroom in Forest that they thought was out of reach.
2025 was a good year for Central Virginia real estate, and it was a good year for The Realty Group Team. More importantly, it was a year when hundreds of families found their home in a region that, in my deeply biased but well-informed opinion, is one of the best places to live in America.
Thank you for reading these posts throughout the year. Thank you for trusting our team with your real estate decisions. And thank you for being part of this community. If 2026 is the year you're ready to make your move, we're here, and we'd be honored to help.
Happy holidays from my family to yours.
Teresa Grant is the Team Lead of The Realty Group Team at Keller Williams in Central Virginia. With over 1,300 properties closed and $343 million in career volume, she brings two decades of data-driven expertise and a genuine love for helping people find their place in Central Virginia. For a personalized 2026 market consultation, call our office or visit therealtygrouponline.com.