Virginia Home Prices Climb Despite Slowing Sales
March 22, 2023 - Robin Spensieri
Welcome Virginia REALTORS®
The Virginia REALTORS® Confidence Survey gathers information from REALTORS® on local housing markets based on their experiences with real estate transactions in the prior month. This month’s Confidence Survey was conducted between October 27 and October 31, 2021 and reflects housing market conditions in Virginia in October 2021. A total of 645 Virginia REALTORS® members responded to the survey, including 543 who had participated in a home sales transaction in the prior 30 days.
|Key Indicators||July 2021||
|Buyer Activity Indexa||77||68||66||66|
|Seller Activity Indexa||41||38||35||36|
|Buyer Activity Index: 3-Month Outlookb||68||63||59||58|
|Seller Activity Index: 3-Month Outlookb||50||47||42||41|
|Current Market Conditions|
|First-time Homebuyers, as a Percent of All Sales||31||33||32||29|
|Cash Sales, as a Percent of All Sales||16||18||20||18|
|Sales as Non-Primary Residence, as a Percent of All Sales||16||16||16||16|
|Average Number of Offers, Most Recent Transaction||3.5||3.2||3.1||2.4|
|Percent of Respondents Who Expect Strong Buyer Activity in 3 Months||44||35||28||29|
|Percent of Respondents Who Expect Strong Seller Activity in 3 Months||24||16||11||12|
|Percent of Respondents Who Expect Prices to Rise in 3 Months||50||44||37||42|
|Percent of Respondents Who Expect Prices to Fall in 3 Months||20||24||27||27|
|Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months||27||29||35||31|
aAn 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.”
bAn index greater than 50 indicates more respondents expect future activity to be “strong” than expected future activity to be “weak”.
According to Virginia REALTORS®, housing market conditions stabilized in October, which could reflect greater confidence buyers and sellers are feeling as the number of COVID-19 Delta variant cases declines. The Buyer Activity Index was 66 in October, unchanged from September. The seller activity index rose from 35 to 36 between September and October.
About 43% of REALTORS® rated the level of buyer activity in their local market as “high to very high” in October, up slightly from September. Nearly half (46%) of REALTORS® reported that the level of buyer activity in the market was “average” in October, and 10% reported local buyer activity as “low to very low.”
According to survey respondents, there were slightly fewer first-time buyers in the market in October. REALTORS® reported that 29.4% of buyers in October were first-time buyers, down from 32.4% in September. About 18% of purchases in October were all-cash purchases, down from 19.5% in September. In October, 16% of buyers purchased a home for a non-primary residence use (e.g., rental property, second home, vacation home). This share has been the same for the past four months.
In this month’s survey, we asked about buyer compromises and compared conditions in October to what we heard from REALTORS® back in March. According to Virginia REALTORS®, buyers are much less likely to be making compromises than they were last spring.
First-time buyers are still more likely than repeat buyers to feel like they have to make compromises in their home search.
The trends showing a decline in buyer compromises mirrors the decline in the share of buyers offering concessions to make their offers more competitive. It appears as though there is somewhat less competition in the market. For example, in October, REALTORS® reported an average of 2.4 offers per sale, which is a drop from the past few months.
There was a slight uptick in seller activity in October, according to the Virginia REALTORS® members who were surveyed. The Seller Activity Index was 36 in October, up slightly from 35 in September. About 14% of respondents reported that seller activity was “high to very high” in their local market in October. About 41% stated that the level of seller activity was “average,” while 43% stated that seller activity was “low to very low.”
Confidence in the future housing market remained fairly steady in October after falling for three straight months.
The Buyer Activity Index: 3-Month Outlook was 58 in October, down one point from September. The future buyer index had dropped significantly between July and September. About 29% of REALTORS® responding to the survey indicated that they thought buyer activity would be strong in their local market in three months, which is up from 28% of respondents last month.
The Seller Activity Index: 3-Month Outlook fell slightly from 42 in September to 41 in October. However, 12% of Virginia REALTORS® reported that they think seller activity will be strong in three months, which is up slightly from last month.
Survey respondents were more optimistic about price growth this month. About 42% of October’s survey respondents expect prices to rise in their local markets, which is up from 37% among September’s survey respondents. The number of REALTORS® who think prices will fall remained unchanged between September and October.
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 +/- 4.0%.
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.
Click here to send any comments or questions about this piece to Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.
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