T
he regional real estate market remained challenging for many home buyers in 2024, with higher prices and interest rates that didn't drop as much as expected. However, investors seemed unfazed by these factors, and more houses were sold in Warren, Shenandoah, and Frederick counties last year than the previous year.

    According to Jennifer Freer Avery, a Front Royal Realtor, buyers got scared when interest rates first started to climb, and sellers also became nervous because they needed to move too. Christi Heflin, branch manager at Alcova Mortgage in Front Royal, said that high prices and high interest rates most impacted first-time home buyers.

    Mortgage rates hovered around 6% in 2024, significantly affecting the buying power of prospective homeowners. Despite a brief drop in rates, they quickly rose again due to a strong jobs report. Heflin noted that many first-time buyers spent months searching for homes but were unable to find anything suitable due to low inventory.

    Despite these challenges, some people who sat out of the market in 2023 made moves in 2024. According to Bright MLS market statistics, Frederick County real estate agents sold property valued at $710.67 million in 2024, up 25.28% from last year. Warren County Realtors saw a similar increase, with sales volume up 23.46%. In Shenandoah County, sold volume was up 13.94%.

    Warren County saw the biggest jump in housing prices, with an increase of 11.77% from $376,812 in 2023 to $421,146 in 2024. Properties spent an average of 33 days on the market. Frederick County saw the smallest year-over-year price increase, rising by 4.58%.

    Heflin attributed the slowest year in her career in mortgage origination to higher prices in Warren County due to its proximity to Northern Virginia and the Washington, D.C., metro area. She noted that local prices put homeownership out of reach for many single professionals like teachers who are unable to overcome both high prices and high interest rates.

    Avery said that last year many of her clients were in a position of needing to buy or sell, as opposed to wanting to move for a bigger or smaller house or different location. She noted that conditions are not ideal, with prices high and interest rates high, making it difficult to find affordable homes.

    Many buyers used conventional financing to purchase homes last year, but a significant percentage paid in cash, according to MLS data. Heflin said that she and her husband bought Service Title Inc. in March, adding that performing closings and settlements through that company has given her a different perspective on the market.

    Avery concurred with Heflin's assessment, noting that many of the cash deals are investors who can afford to purchase properties that need work and bring in a contractor to make improvements – an option not available to many young families. Avery said that in many cases, investors buy affordable homes, do the improvements, and sell them at unaffordable prices for local families.

    Looking forward to 2025, Avery doesn't anticipate a huge influx of new inventory of housing and notes industry-wide uncertainty about interest rates. The Virginia Association of Realtors predicts an increase of 2.6% in new housing starts in 2025 along with an increase of 3.4% in median home prices.

    Avery said that she noticed families were willing to make sacrifices to purchase a home despite the financial challenges, and Heflin noted that it will take time for market conditions to change. She believes that the housing industry is strong and will remain so, but prices won't fall due to supply and demand issues.