Competition in Virginia’s frenzied housing market has been intense. Buyers face a lot of competition, increasingly from investors who can pay cash. In this month’s Flash Survey, we asked our Virginia REALTORS® members to share insights on whether investors and all-cash buyers are a major part of the local market, and whether rental properties are coming onto the for-sale market. Between April 21 through April 25, we received responses from 689 Virginia REALTORS® members who had worked with a buyer or seller in 2021.
Here are highlights from the April 2021 Flash Survey:
- More than one out of five (21.8%) home sales transactions reported on by Virginia REALTORS® members involved the buyer paying cash.
- The majority of buyers finance their home purchase, with 61.1% of buyers using a conventional mortgage and 25.3% financing with an FHA or VA loan. (Note: respondents could select more than one option so the percentages sum to more than 100.)
- Based on our survey, about nine percent of transactions in 2021 could be classified as “investor purchases.” According to Virginia REALTORS® members, 5.8% of buyers in recent transactions were planning to use the home as a rental property, and 3.3% were planning to renovate or remodel the home and “flip” it.
- Forty percent of Virginia REALTORS® members who responded to this survey said that they had been involved in the sale of a rental property in 2021. According to these respondents, nearly 60% of rental property sales were sales of single-family rentals. Almost a quarter (22.6%) were townhomes or duplexes and 15.9% were condominium rentals in multifamily buildings.
- Owners of rental properties were most often looking to sell because demand and home sales prices are high. Nearly two-thirds of REALTORS® (64.5%) involved in the sale of a rental property said that the sellers listed their rental property to take advantage of the “hot” housing market.
- Some owners of rental properties were selling because of challenges with being a landlord or property manager. About one in five REALTORS® (19.5%) said that the rental property owner they worked with was tired of dealing with “problematic” tenants, including tenants who fail to pay rent and/or damage the property. About a third (32.8%) said that they owner simply wanted to stop being a landlord or get out of the property management business.
- Seven percent of REALTORS® said that the COVID-19-related eviction moratoria prompted the rental property owner to sell the home.
A note about surveys: This is not a randomized sample survey of Virginia REALTORS® members. However, the number of responses and the geographic coverage of respondents make it possible to draw conclusions about the population of Virginia REALTORS® working with buyers and sellers in 2021 with a certain level of confidence. These statistics from this survey have a margin of error of +/- 3.7%.
Responses to our surveys are confidential. We do not look at individual responses but rather report data in the aggregate.
Virginia REALTORS® reports on the economy and housing market in Virginia. New information is updated on the Virginia REALTORS® website. A new Flash Survey is sent out at the end of each month. For more information or to make suggestions for a Flash Survey topic, please contact Virginia REALTORS® Chief Economist, Lisa Sturtevant (email@example.com).