Inventory, Interest Rate Concerns Troubled Fredericksburg Real Estate In 2023: Report

FREDERICKSBURG, VA — 2023 was a volatile year for the Fredericksburg housing market, according to the end-of-year report from the Fredericksburg Area Association of Realtors. Experts cited concerns about low inventory and ever-changing interest rates for the unstable market.

Randy Walther is the president of the Fredericksburg Area Association of Realtors.

"The real estate market in the Fredericksburg area saw a continuation of low inventory issues in 2023,” Walther said in a news release. “The start of the year held hope that a stable market would take hold but rising interest rates quickly changed that outlook.”

In 2023, the region's real estate market reached $2.64 billion. The end-of-year total represented a 21 percent decrease from 2022's sales. Prices increased throughout the region as inventory and sales declined.

The median home price rose from $425,600 in 2022 to $439,900 in 2023. The number of home sales has decreased each of the last two years, from 9,266 units sold in 2021 to 7,284 units in 2022 and 5,531 transactions in 2023.

"As the year progressed, sellers were less inclined to give up a low interest rate loan if they had to assume a new loan at a higher rate,” Walther said. “Even with higher rates, houses did not sit on the market for an extended period if they were move-in ready. A large portion of buyers brought funds to the table that allowed them to buy down a new loan or in many cases, they paid cash from the sale of a previous home."

Homes also spent more time on the market in 2023. The average house was listed for sale for 27 days in 2023, compared to 20 days in 2022. The report noted that 49 percent of homes are sold within 10 days.

The report expects similar market conditions for 2024. Walther said interested homebuyers may want to start the process sooner than later, as prices are not expected to drop in the future.

The full FAAR real estate market report is available online.