#39 Low Inventory and Higher Rates are Strongly Impacting Their Local Markets: Results from the Virginia REALTORS® Confidence Survey

By Abel Opoku-Adjei
Research Associate, Virginia REALTORS®

Each month, the Virginia REALTORS® Confidence Survey gathers insights from REALTORS® on local housing markets based on their experiences with real estate transactions in the prior month. This information provides a real-time look at housing market conditions. This month’s Confidence Survey was conducted between December 27th and January 3rd, 2023, and reflects housing market conditions in Virginia in December 2022. A total of 632 Virginia REALTORS® members responded to the survey, including 444 who had participated in a home sales transaction in the last 31 days.

Current Market Conditions

Buyers

According to Virginia REALTORS®, buyer activity increased in December. The Buyer Activity index for the month was 24, an increase from November (21). About 7% of REALTORS® rated the level of buyer activity in their local markets as “high” or “very high”, and about 59% of REALTORS® rated buyer activity in their local market as “low” or “very low”.

Current Market Conditions Jan2023

According to survey respondents, about 28% of buyers in December were first-time home buyers, a 4% increase from last month. In December, roughly 22% of respondents accepted an all-cash purchase, down from 28% in November. During the last month of the year, there were about 22% of non-primary residence sales (e.g., rental property, second home, vacation home), which is unchanged from November.

The average number of offers declined from November to December, according to REALTORS® responding to the Confidence Survey. Recent transactions received an average of 1.3 offers in December, a slight decrease from 1.5 offers on average in November. For the month of December, about 26% of respondents stated that offers were coming in above the listing price, down from 28% in November.

 

Sellers

Seller activity fell to its lowest level in December, according to Virginia REALTORS®. In December, the Seller Activity Index was 17, down from 20 in November. Only about 2% of REALTORS® reported that seller activity was “high to very high” in their local market, down 1% compared to last month. About 68% of respondents reported that seller activity was “low to very low”, an increase from last month when it was 62%.

Market Outlook

Confidence in future home buyer activity increased in December compared to last month. This index gauges how REALTORS® think the market will be performing in the following three months. The index climbed to 38 in December, up from 30 in November. Roughly 12% of respondents indicated that they thought buyer activity would be strong in the next three months in their local markets; this share is up 4% from November.

The Seller Activity Index: 3-Month Outlook increased in December. The index this month was 33, a rise from 30 in November. Around 7% of Virginia REALTORS® reported that they think seller activity will be strong in three months, increasing by 3% from a month ago.

Market Outlook Jan 2023

The share of survey respondents who expect prices to rise in their local markets in the next three months increased in December. About 14% of Virginia REALTORS® responding to the survey stated that they believe prices will increase within the next three months. The majority of REALTORS® (55%) believe that home prices will begin to fall within the next three months. Around 29% of respondents to the survey indicated that prices would most likely remain the same for the next three months.

 

Virginia REALTORS® Confidence Survey: 2022 Highlights

 

Key Indicators

Jan

2022

Feb

2022

Mar

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Apr

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May

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June

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July

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Aug

2022

 Sep 2022 Oct 2022

Nov

2022

Dec

2022
Buyer Activity Indexa 76 78 84 71 56 48 43 39 29 23 21 24
Seller Activity Indexa 20 19 20 26 33 31 33 29 27 21 20 17
Buyer Activity Index: 3-Month Outlookb 83 77 75 61 45 39 41 42 25 22 30 38
Seller Activity Index: 3-Month Outlookb 43 40 40 41 42 42 40 39 30 26 30 33
Current Market Conditions                        
First-time Homebuyers, as a Percent of All Sales 29 32 33 30 30 27 29 28 32 24 24 28
Cash Sales, as a Percent of All Sales 18 18 18 21 16 16 19 22 19 21 28 22
Sales as Non-Primary Residence, as a Percent of All Sales 21 14 16 19 15 15 17 18 18 20 22 22
Average Number of Offers, Most Recent Transaction 4.1 6.3 6.6 5.3 2.9 3.1 1.8 1.7 1.7 1.8 1.5 1.3
Market Outlook                
Percent of Respondents Who Expect Strong Buyer Activity in 3 Months 70 63 59 36 18 13 11 12 6 6 8 12
Percent of Respondents Who Expect Strong Seller Activity in 3 Months 19 20 18 16 14 12 9 9 6 3 4 7
Percent of Respondents Who Expect Prices to Rise in 3 Months 64 69 68 43 32 19 18 14 9 7 9 14
Percent of Respondents Who Expect Prices to Fall in 3 Months 7 8 10 25 33 49 53 51 66 72 67 55
Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months 26 21 18 28 32 30 26 30 23 20 22 29

 

A An index greater than 50 indicates more respondents reported the level of activity as “high to very high” than reported the level of activity as “low to very low.”

B An index greater than 50 indicates more respondents expect future activity to be “strong” than expect future activity to be “weak”.

 

 

 

 

 

 

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 opinions and expectations of Virginia REALTORS®. These statistics from this survey have a margin of error of +/- 3.9%.

Responses to our surveys are confidential. We do not look at individual responses but rather report data in the aggregate.

For more information about Virginia’s housing market, check out our most recent home sales report, local housing market data, or Facebook Live.

 

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