Charlottesville Area Housing Market Wrap-Up: What the Fourth Quarter of 2025 Tells Us
The Charlottesville-area housing market closed out 2025 on a stronger note than many expected. According to the Charlottesville Area Association of REALTORS® (CAAR) Fourth Quarter 2025 Home Sales Report, buyer activity picked up, inventory continued to expand, and mortgage rates finally showed meaningful downward movement. Together, these trends are beginning to reshape the local market as we move into 2026.
Economic conditions set the stage
On the economic front, conditions remain mixed but generally stable. Virginia’s unemployment rate rose to 3.9 percent in November 2025, while the CAAR footprint remained lower at 2.9 percent. Job growth slowed statewide, reflecting broader national trends and federal workforce adjustments, though the Charlottesville region still saw modest job gains.
One of the most notable shifts came from interest rates. By the second week of January 2026, the average 30-year fixed mortgage rate had dropped to 6.06 percent, the lowest level since September 2022. This nearly one-percentage-point decline from early 2025 has already begun to bring more buyers back into the market, especially those who had been waiting on the sidelines.
Home sales rebound across the region
Sales activity showed clear improvement in the fourth quarter. The CAAR region recorded 970 home sales, a 10 percent increase over the same quarter in 2024. This gain was broad-based, with most local jurisdictions experiencing year-over-year growth.
Greene County saw the most dramatic increase, with sales jumping 85 percent, while Fluvanna County posted a 20 percent gain. Albemarle County and the City of Charlottesville experienced more modest but steady growth. Nelson County was the only jurisdiction to see a decline in sales activity. Overall, the increase in transactions translated into more momentum heading into the new year.
Prices soften regionwide but vary locally
While sales increased, home prices told a more nuanced story. The median sales price across the CAAR region dipped 2 percent year-over-year to $464,995, marking the second consecutive quarterly decline. This softening reflects a market that is beginning to rebalance after several years of rapid appreciation.
That said, price trends varied significantly by location. Charlottesville’s median sales price rose 10 percent, and Greene County saw an 8 percent increase. In contrast, Fluvanna, Louisa, and Nelson Counties experienced price declines ranging from 5 to 9 percent. These differences highlight the importance of local market knowledge, as neighborhood and county-level trends can diverge sharply even within the same region.
Inventory growth creates more breathing room
One of the most impactful shifts for buyers and sellers alike has been inventory growth. The fourth quarter ended with 925 active listings in the CAAR market, a 34 percent increase from a year earlier. Months of supply rose to 3.0, up from 2.3 months last year.
While this is still below what would be considered a fully balanced market, it represents meaningful progress. Buyers are seeing more options and slightly less competition, while sellers are facing a market that requires thoughtful pricing and strong presentation. Homes are also taking a bit longer to sell, with median days on market increasing to 17 days regionwide.
Sold volume continues to climb
Despite softer prices in some areas, total sold dollar volume rose for the eighth consecutive quarter. The CAAR region recorded nearly $591 million in sold volume during the fourth quarter, an 11 percent increase from the prior year. Higher transaction counts were the primary driver of this growth, particularly in Albemarle and Greene Counties.
This continued rise in sold volume suggests that buyer demand remains resilient, even as market conditions normalize.
What this means heading into 2026
As we move into 2026, the Charlottesville-area housing market appears to be transitioning into a more balanced phase. Lower mortgage rates are helping unlock buyer demand, while increased inventory is creating a healthier environment for informed decision-making on both sides of the transaction.
For buyers, this means more choices and slightly less pressure. For sellers, success increasingly depends on accurate pricing, preparation, and understanding how local trends impact value. The market is still active, but strategy matters more than it did a year ago.
If you are considering buying or selling this year, understanding these local trends can make a significant difference. The fourth quarter data shows that while the pace has shifted, opportunity remains strong in the Charlottesville-area real estate market.
Have questions about how all of this impacts your decision to buy or sell? We can help!
