September 13, 2023 - Abel Opoku-Adjei
By Lisa Sturtevant, PhD
Chief Economist, 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 January 26 and 31, 2022, and reflects housing market conditions in Virginia in January 2022. A total of 702 Virginia REALTORS® members responded to the survey, including 539 who had participated in a home sales transaction in the prior 30 days.
Virginia REALTORS® Confidence Survey: Highlights
|Key Indicators||July 2021||
|Nov 2021||Dec 2021||Jan 2022|
|Buyer Activity Indexa||77||68||66||66||66||64||76|
|Seller Activity Indexa||41||38||35||36||30||24||20|
|Buyer Activity Index: 3-Month Outlookb||68||63||59||58||72||78||83|
|Seller Activity Index: 3-Month Outlookb||50||47||42||41||49||50||43|
|Current Market Conditions|
|First-time Homebuyers, as a Percent of All Sales||31||33||32||29||33||31||29|
|Cash Sales, as a Percent of All Sales||16||18||20||18||18||19||18|
|Sales as Non-Primary Residence, as a Percent of All Sales||16||16||16||16||17||18||21|
|Average Number of Offers, Most Recent Transaction||3.5||3.2||3.1||2.4||2.9||3.0||4.1|
|Percent of Respondents Who Expect Strong Buyer Activity in 3 Months||44||35||28||29||50||60||70|
|Percent of Respondents Who Expect Strong Seller Activity in 3 Months||24||16||11||12||22||25||19|
|Percent of Respondents Who Expect Prices to Rise in 3 Months||50||44||37||42||49||59||64|
|Percent of Respondents Who Expect Prices to Fall in 3 Months||20||24||27||27||17||11||7|
|Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months||27||29||35||31||31||27||26|
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”.
Current Market Conditions
The Virginia REALTORS® Buyer Activity Index increased in January, as REALTORS® indicate that demand was strong. Despite the snowy January, the Buyer Activity index for the month was 76, up dramatically from 64 in December. About 61% of REALTORS® rated the level of buyer activity in their local markets as “high” or “very high”, which is up nearly 20 percentage points compared to a month earlier (43%). Less than 10% of REALTORS® rated buyer activity in their local market as “low” or “very low”.
According to survey respondents, 29% of buyers in January were first-time buyers, a slightly decline from recent months. About 18% of purchases in January were all-cash purchases and 21% of buyers purchased a home for a non-primary residence use (e.g., rental property, second home, vacation home). The share of purchases for non-primary purposes is up compared to recent months.
An uptick in multiple offers is indicative of the competitive market. According to this month’s survey, recent transactions received an average of 4.1 offers, up from an average of three offers in December. This is the highest average number of offers since the REALTOR® Confidence Survey began in July 2021.
Seller activity continues to plummet, according to Virginia REALTORS®. In January, the Seller Activity Index was 20, down from 24 in December. Less than 8% of respondents reported that seller activity was “high to very high” in their local market, a slight sip from a month earlier. Nearly seven out of 10 REALTORS® (68%) reported that seller activity was “low to very low”, which is up significantly from recent months.
Confidence in home buyer demand has increased among Virginia REALTORS® though there is significant concerns about the outlook for inventory.
The Buyer Activity Index: 3-Month Outlook was 83 in January, up from 78 in December, and the highest level since the survey began in July. Nearly 70% of REALTORS® responding to the survey indicated that they thought buyer activity would be strong in their local market in three months.
The Seller Activity Index: 3-Month Outlook fell in January, indicating less optimism in the market ahead. The index was 43, which is down seven points from December. Less than 20% of Virginia REALTORS® reported that they think seller activity will be strong in three months, which is down from a month ago. Nearly a third of REALTORS® (32%) report they expect seller activity to be weak in three months. This share is up significantly from December.
Despite seller changes—or maybe because of limited seller activity—survey respondents expect strong price growth in their local markets in the next three months. Nearly two-thirds of Virginia REALTORS® responding to the survey (64%) expect prices will rise in their local markets, which is up from 59% in December. Seven percent of REALTORS® responding to the January survey stated that they thought prices would fall over the next three months, which is the lowest share since the survey began in July 2021. This share has been declining since September.
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 +/- 3.5%.
Responses to our surveys are confidential. We do not look at individual responses but rather report data in the aggregate.
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