Buyer Activity Remained Unchanged from the Prior Month as Economic Uncertainty Looms According to REALTORS^® in Virginia

By Abel Opoku-Adjei
Research Associate, Virginia REALTORS^®

Each month, the Virginia REALTORS^® Confidence Survey gathers important information from REALTORS^® on local housing markets based on their experiences with real estate transactions in the prior month. This data provides a real-time look at housing market conditions. This month’s Confidence Survey was conducted between October 25th and October 31st, 2024, and reflects housing market conditions in Virginia in October 2024. A total of 615 Virginia REALTORS^® members responded to the survey, including 441 who participated in a home sales transaction in the past month.

Current Market Conditions

Buyers

Results from the survey indicated that buyer activity was stagnant in October compared to September. The Buyer Activity Index in October was 37, unchanged from the previous month. Roughly  13% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in October, and 40% of REALTORS^® rated buyer activity in their local market as “low” or “very low”.

Results From Virginia REALTORS^® Confidence Survey

Regarding their most recent transaction, 27% of survey respondents said the transaction involved a first-time home buyer, a 1% decrease compared to September. Around 22% of recent home transactions in October were all-cash purchases, a 1% decline from September. About 20% of REALTORS^® stated their recent transaction in October involved a non-primary residence (e.g., rental property, second home, vacation home), unchanged from the prior month.

Recent transactions received an average of 2.1 offers in October, an increase from 1.9 offers in September. Nearly 29% of REALTORS^® stated that bids in October came in above the listing price, a 5% decrease compared to September.

Sellers

Seller activity increased slightly from September to October, REALTORS^® in Virginia. The Seller Activity Index in October was 28, up from 27 in September. About 6% of REALTORS^® reported that seller activity was “high to very high” in their local market, and 50% of respondents said seller activity was “low to very low.”

Obstacles

Buyers

About 36% of survey respondents stated that the lack of housing in their local market was a significant issue for their clients, and 19 % stated that rising mortgage rates are the main reason their clients couldn’t buy a home in October. Many potential buyers face a combination of these obstacles while buying a home. Mortgage rates started to rise in October, prompting many buyers to halt their home purchases. This increase in mortgage rates is likely due to the impending conclusion of the election, creating some economic uncertainty.   

Results From Virginia REALTORS^® Confidence Survey

Sellers

In the October survey, approximately 16% of Virginia REALTORS^® reported that their seller clients were hesitant to move because they did not want to lose their low interest rates. About 11% noted that the lack of housing options in Virginia was also affecting their sellers’ willingness to relocate. Additionally, around 11% of REALTORS indicated that rising home prices were the primary reason their clients were reluctant to sell, as they feared not being able to find an affordable replacement home. Many homeowners, having locked in low rates during the pandemic, have contributed to tightened inventory constraints in the market.

Results From Virginia REALTORS^® Confidence Survey

Pending Sales Activity

In September, Virginia recorded 8,119 pending sales, which is 978 more than the previous year, representing a 13.7% increase. While pending sales generally close successfully, there are common reasons why some do not. According to an October survey, 408 realtors reported that one or more of their seller clients had a purchase agreement, and 103 of those agreements did not close as intended.

We asked REALTORS^® about the most common reasons causing the pending sale to fall through in October. Approximately 38% of respondents indicated that inspection issues were the primary reason the purchase agreement failed. Nearly 30% noted that the buyer’s mortgage application was not approved. Around 12% reported that the buyer’s previous home could not sell in time to finalize the purchase agreement. Additionally, 5% of REALTORS^® mentioned that the buyer lost their job or encountered financial difficulties that jeopardized mortgage approval. Lastly, roughly 8% cited that a low appraisal hindered the deal from closing.

Reasons For Selling

Results From Virginia REALTORS^® Confidence Survey

In October, a survey of REALTORS^® in Virginia revealed that 19% reported their seller clients were planning to move out of the state. Additionally, 14% indicated that clients were considering relocating to a different area within Virginia. About 21% of REALTORS^® noted that their clients were looking to downsize within their current location, while 15% were seeking larger homes in the same area. Furthermore, around 9% mentioned that their clients were looking to sell a second home in October.

Market Outlook

Results From Virginia REALTORS^® Confidence Survey

Confidence in the buyer outlook remained stable from the previous month, according to Virginia REALTORS^®. This index measures REALTORS^®’ expectations for market performance over the next three months. In October, the three-month buyer activity index stood at 49, unchanged from September. Approximately 22% of respondents believe that buyer activity will increase in their local markets within the next three months, while 23% anticipate a decline in buyer activity.

The Seller Activity Index (3-Month Outlook) increased from September to October, with the index rising from 37 in September to 41 in October. About 12% of Virginia REALTORS^® expect seller activity to improve in three months, while 31% believe it will decrease.

Furthermore, around 39% of the Virginia REALTORS^® who participated in the survey indicated that they foresee prices rising over the next three months. Nearly 24% believe home prices will fall between November and December, and 32% think prices will remain stable.

Virginia REALTORS^® Confidence Survey: 2024 Highlights

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 expected 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 +/- 3.88%.

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 and local housing market data.