September 2025: Arlington Real Estate Market Report
Executive Summary
September 2025 marks a clear power shift in Arlington’s real estate market. With 2.67 months of inventory and 478 active listings—up 52.7% from last year—buyers have gained significant leverage. The data tells a stark story: 11.3% of listings failed completely, an estimated 25-35% reduced prices, and the market has moved decisively in buyers’ favor.
Key Metrics
| Metric | September 2025 | vs Sept 2024 | Change |
|---|---|---|---|
| Closed Sales | 179 | 143 | +25.2% |
| Median Price | $675,000 | $769,000 | -12.2% |
| Average Price | $988,434 | $952,257 | +3.8% |
| Days on Market | 36 days | 23 days | +56.5% |
| Active Listings | 478 | 313 | +52.7% |
| Months of Inventory | 2.67 | 2.19 | +21.9% |
| Pending Sales | 208 | 178 | +16.9% |
Market Status: Buyers Have Leverage
2.67 months of inventory represents a critical shift. Arlington’s market has moved from balanced to buyer-favorable conditions. Combined with 478 active listings (highest in years), buyers can now be selective, take time for due diligence, and negotiate confidently.
The gap between median ($675K, down 12.2%) and average ($988K, up 3.8%) reveals sharp segmentation: entry-level properties corrected downward while luxury detached homes surged.
The Harsh Reality: Failed Listings
115 listings failed in September—11.3% of all activity:
| Status | Count | What It Means |
|---|---|---|
| Expired | 60 | Overpriced, sat until listing period ended |
| Withdrawn | 33 | Seller pulled to reprice or rethink |
| Canceled | 22 | Deals fell through |
| Temp Off Market | 35 | Paused for strategy adjustment |
Bottom line: 1 in 9 listings fails completely. This is the market punishing overpricing and unrealistic expectations.
Price Reductions: Sellers Adjusting
Estimated 25-35% of active listings reduce price at least once:
- Condos: 35-40% reduction rate (softest segment)
- Townhomes: 25-30% reduction rate (stable middle)
- Detached Homes: 20-25% reduction rate (strongest segment)
Average reduction: 3-7% from original asking price
What this means: Combined with the 11.3% failure rate, approximately 40-45% of sellers face pricing challenges—either reducing price, withdrawing, or watching listings expire.
Performance by Property Type
Condos: The Affordability Correction
| Metric | Value |
|---|---|
| Median Price | $400,000 |
| Average Price | $436,127 |
| Sales | 78 units |
| Market Share | 43.6% of all sales |
The $400K median is down $50K from August and well below last year’s levels. This correction creates real opportunity for first-time buyers who’ve been priced out.
For condo buyers: This is your moment. Inventory is up, prices are down, sellers are negotiating.
For condo sellers: Price aggressively. You’re competing with 200+ condo listings. Overpricing means sitting or failing. The market has spoken—listen.
Townhomes: Stable Middle Ground
| Type | Sales | Median | Average |
|---|---|---|---|
| End-of-Row | 14 | $769,000 | $845,429 |
| Interior Row | 18 | $749,000 | $890,694 |
Townhomes demonstrate stability in the $750K-$900K range. This segment serves move-up buyers leaving condos and downsizers from larger homes. Pricing remains predictable; demand stays consistent.
Single-Family Detached: Scarcity Wins
| Metric | Value |
|---|---|
| Median Price | $1.46 million |
| Average Price | $1.85 million |
| Sales | 57 homes |
| YoY Average Change | +25.7% |
While condos softened and the overall median dropped 12.2%, detached homes surged 25.7% year-over-year. This is supply and demand mathematics: Arlington cannot create more single-family lots, and established buyers with capital continue competing for finite inventory.
Luxury Market ($2M+): Buyer’s Advantage
| Metric | Value |
|---|---|
| Sales | 12 homes |
| Market Share | 6.7% of all sales |
| Active Listings | ~45 properties |
| Months of Inventory | 3.75 months |
| Days on Market | 36+ days |
Critical finding: The luxury market has 3.75 months of inventory—significantly higher than the overall 2.67 months. This is a buyer’s market at the high end.
For luxury sellers ($2M+): You’re competing with 40-50 other properties. Price must be sharp. Expect 40-60+ days to sell. Overpricing by even 5% can mean months of sitting.
For luxury buyers ($2M+): Best conditions in years. Take your time. Negotiate confidently on properties over 45 days. Sellers know inventory is building.
Price Distribution
| Price Range | % of Sales | Primary Property Types |
|---|---|---|
| Under $300K | 14.5% | Condos |
| $300K-$500K | 21.8% | Condos, small townhomes |
| $500K-$750K | 20.1% | Condos, townhomes |
| $750K-$1M | 15.1% | Townhomes, smaller detached |
| $1M-$1.5M | 16.2% | Detached homes |
| $1.5M-$2M | 5.6% | Larger detached homes |
| $2M+ | 6.7% | Luxury detached homes |
Key insight: 56.4% of all sales occur below $750K. The market’s health depends on maintaining affordability at entry and middle tiers.
What You Need to Do
If You’re Buying
You have significant leverage:
✓ Take your time
- 478 active listings = genuine choice
- 36 days average = time for inspections and due diligence
- No need to panic-bid or waive contingencies
✓ Negotiate confidently
- Sellers accepting 2-3% below ask on average
- 11.3% of listings are failing—some sellers are motivated
- 25-35% of sellers will reduce price
✓ Target opportunities
- Listings over 30 days old (sellers getting anxious)
- Price-reduced properties (motivated sellers)
- Expired listings that relist (reality has set in)
✓ By price range:
- Under $500K (condos): Maximum leverage; negotiate hard
- $500K-$1M (townhomes): Balanced; fair offers accepted
- $1M-$2M (detached): Still competitive but room to negotiate
- $2M+ (luxury): Strong buyer’s market; take your time
If You’re Selling
Reality check required:
⚠️ The statistics are brutal
- 1 in 9 listings fails completely (11.3%)
- 1 in 3 sellers reduces price (25-35%)
- 60 listings expired from overpricing
- 2.67 months inventory = buyers have options
⚠️ Price within 3% of recent comparables
- Not aspirational pricing
- Not what you “need” to get
- What similar properties actually sold for in last 30-60 days
⚠️ First two weeks are critical
- No showings = overpriced
- No offers = overpriced
- Reduce quickly or watch your listing die slowly
⚠️ By property type:
- Condos: Most competitive; price 5% under comps to move fast
- Townhomes: Price at market; you’ll negotiate 2-3% down
- Detached under $2M: Price fairly; you’ll still get interest
- Luxury $2M+: Sharp pricing essential; 3.75 months inventory
⚠️ Professional presentation matters
- Stage properly
- Professional photos
- Strategic marketing
- But pricing trumps everything
If You’re Holding (Not Buying or Selling)
Your situation depends on what you own:
Condo owners:
- Values softened from 2024 peaks
- Long-term fundamentals (Metro, walkability) intact
- If you bought years ago, still ahead
- If you bought recently, this is cyclical—hold if you can
Townhome owners:
- Stable middle ground
- Values holding reasonably well
- Less volatility than condos or luxury
- Good position for long-term hold
Detached home owners:
- Strong appreciation (+25.7% average year-over-year)
- Supply scarcity supporting values
- Best-performing segment
- Excellent long-term hold position
Luxury home owners ($2M+):
- Inventory building (3.75 months)
- If not selling now, may be better to wait
- Quality properties in premium locations still move
- Market will rebalance over time
Market Outlook
September 2025 represents the clearest buyer’s advantage in years. The combination of increased inventory (up 52.7%), longer selling times (up 56.5%), high failure rates (11.3%), and widespread price reductions (25-35%) creates conditions favoring buyers across most price points.
However, this is not a collapse. Transaction volume is up 25.2% year-over-year, and 208 properties went under contract in September. The market is functioning—it’s just shifted from seller-favorable to buyer-favorable.
The bifurcation is real:
- Entry-level (condos): Correcting to improve affordability
- Middle market (townhomes): Stable and predictable
- Premium (detached): Strong due to supply constraints
- Luxury ($2M+): Buyer’s market with inventory building
For buyers: This is your window. Leverage is on your side for the first time since 2020. Use it wisely—don’t overpay, take your time, negotiate.
For sellers: Accept the new reality. Price aggressively, present professionally, negotiate fairly. The market will not bail out overpricing. 1 in 9 sellers is learning this the hard way.
For everyone: Arlington’s fundamentals—proximity to DC, Metro access, top schools, walkability—remain intact. This is market normalization, not dysfunction. Values may fluctuate, but the underlying reasons to live in Arlington haven’t changed.
The market is simply demanding realistic pricing and fair negotiations. That’s not a crisis. That’s a healthy market doing what markets do.
Data reflects September 2025 market activity in Arlington County, VA. Market conditions vary by neighborhood, price point, and property condition. All buyers and sellers should consult qualified real estate professionals for personalized guidance.



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