Virginia REALTORS^® are Expecting Home Prices to Rise as Buyer Activity Increases

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 December 27th, 2024, and January 2nd, 2025, and reflects housing market conditions in Virginia in December 2024. A total of 459 Virginia REALTORS^® members responded to the survey, including 267 who participated in a home sales transaction in the past month.

Current Market Conditions

Buyers
REALTORS^® in Virginia saw an uptick in buyer activity from November to December. The Buyer Activity Index in December was 38, up from 32 in November. Roughly 16% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in November, and 40% of REALTORS^® rated buyer activity in their local market as “low” or “very low.”

Results From Virginia REALTORS^® Confidence Survey

According to REALTORS^® who responded to the survey, 26% of survey respondents stated their most recent transaction involved a first-time home buyer, a 5% drop compared to November. Roughly 25% of recent home sales in December were all-cash purchases, unchanged from the prior month. About 21% of REALTORS^® stated their recent transaction in December involved a non-primary residence (e.g., rental property, second home, vacation home), up from 19% in November.

Recent transactions received an average of 1.8 offers in December, unchanged from last month. Approximately 30% of REALTORS^® stated that bids in December came in above the listing price, down one compared to last month.

Sellers
Seller activity fell slightly from November to December, according to REALTORS^® in Virginia. The Seller Activity Index in December was 22, down from 23 in November. About 4% of REALTORS^® reported that seller activity was “high to very high” in their local market, and 60% of respondents said seller activity was “low to very low.”

Obstacles

Buyers
Nearly 40% of survey respondents indicated that the lack of available housing in their local market was a significant issue for their clients. Additionally, 21% reported that rising mortgage rates were the main reason their clients were unable to purchase a home in December. Around 4% of REALTORS^® noted that their clients struggled to save for a down payment. All of these factors hindered potential buyers from entering the housing market in December.

Results From Virginia REALTORS^® Confidence Survey

Sellers

About 16% of Virginia REALTORS^® reported that their seller clients hesitated to move in December due to concerns about losing their low interest rates. According to the survey results, 14% of REALTORS^® indicated that their clients struggled to find a suitable home due to a lack of inventory in the market. Additionally, approximately 12% of REALTORS^® indicated that rising home prices were the main reason their clients struggled to sell their homes in December. Throughout the year, the majority of sellers faced a mixture of these obstacles.

Results From Virginia REALTORS^® Confidence Survey

Pending Sales Activity

According to our November report, Virginia had 6,863 pending sales, which is 905 more than the previous year, resulting in a 15.2% increase. While pending sales generally close successfully, there are common reasons why some do not. In December, 281 REALTORS^® reported that one or more of their seller clients had a purchase agreement, and 186 of those agreements did not close as intended.

We asked REALTORS^® about the most common reasons causing the pending sale to fall through in December. About 53% of respondents indicated that inspection issues were the primary reason the purchase agreement failed and 6% stated the appraisal came too low. Nearly 27% noted that the buyer’s mortgage application was not approved. Around 16% reported that the buyer’s previous home could not sell in time to finalize the purchase agreement. Lastly, 8% of REALTORS^® mentioned that the buyer lost their job or encountered financial difficulties that hindered their mortgage approval.

Reasons For Selling

Results From Virginia REALTORS^® Confidence Survey

In December, 23% of REALTORS^® in Virginia indicated that their seller clients were planning to move out of the state. Approximately 10% indicated that clients were considering relocating to a different area within Virginia. Virtually 19% of REALTORS^® noted that their clients were looking to downsize within their current location, while 16% were looking for larger homes in the same area. Lastly, around 7% mentioned that their clients were trying to sell a second home in December.

Market Outlook

Results From Virginia REALTORS^® Confidence Survey

Optimism amongst the Virginia REALTORS^® continues to rise about future market activity. This index measures REALTORS^®’ expectations for market performance over the next three months. The three-month buyer activity index in December was 60, up from 52 in November. Around 33% of respondents believe that buyer activity will increase in their local markets within the next three months, while 14% anticipate a decline in buyer activity.

The Seller Activity Index (3-Month Outlook) increased from November to December, with the index rising from 47 in November to 49 in December. About 16% of Virginia REALTORS^® expect seller activity to improve in three months, while 19% believe it will decrease.

Lastly, virtually 48% of the Virginia REALTORS^® that took the survey expect home prices to increase in the next three months. Furthermore, roughly 17% predict that prices will decline between January and March, and 29% believe 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^®. The 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, local housing market data.