June 24, 2022 - Ryan Price
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 March 23 and 27, 2022, and reflects housing market conditions in Virginia in March 2022. A total of 1,164 Virginia REALTORS® members responded to the survey, including 928 who had participated in a home sales transaction in the prior 30 days.
Current Market Conditions
According to Virginia REALTORS®, buyer activity hit a nine-month high in March. The Buyer Activity index for the month was 84, up from 78 in February and the highest level since the REALTOR® Confidence Survey launched in July 2021. About 75% of REALTORS® rated the level of buyer activity in their local markets as “high” or “very high,” and only 6% of REALTORS® rated buyer activity in their local market as “low” or “very low”.
About a third of buyers in March were first-time buyers, according to survey respondents, which is about the same share of first-time buyers in earlier surveys. About 18% of purchases in March were all-cash purchases, which is also virtually unchanged from earlier months. About 16% of sales in March were non-primary residence sales (e.g., rental property, second home, vacation home).
Multiple offers continued to be the norm in March, according to REALTORS® responding to this month’s survey. Recent transactions received an average of 6.6 offers. More than three quarters (76.8%) of respondents indicated that offers were coming in above list price.
There have been concerns that some buyers are pushing up prices too high and that they might end up “under water” on their mortgage. In this month’s survey, REALTORS® were asked if they were worried that buyers are offering prices that will put them in a financial disadvantage when it comes time for them to sell. More than four in ten REALTORS® (40.5%) said that buyers were “definitely” offering prices that will ultimately put them at a disadvantage when they go to sell. Another 42% of respondents said that “some buyers” might be putting themselves in a bad situation by offering too high a price. Just 15.7% of respondents to the survey said that buyers are not offering prices that will ultimately put them at a disadvantage when they go to sell.
Seller activity stabilized in March, according to Virginia REALTORS®. In March, the Seller Activity Index was 20, up from 19 in February. About 9.7% of respondents reported that seller activity was “high to very high” in their local market. Seven out of ten REALTORS® (69%) reported that seller activity was “low to very low.”
The most significant constraint in the market remains inventory. About 83% of REALTORS® responding to the March survey said that a lack of inventory was the biggest challenge in today’s housing market. Only 8% said high home prices and 4% said that rising mortgage rates were the biggest challenges in the market.
While confidence in future home buyer activity remains high, there has been a slight decline in the Buyer Activity Index: 3-Month Outlook in recent months. This index gauges how REALTORS® think the market will be performing in three months’ time. In March, the buyer outlook index was 75, which was down from 77 in February and down from a peak of 83 in January.
About 59% of REALTORS® responding to the survey indicated that they thought buyer activity would be strong in their local markets in three months. That share is down from 63% of respondents in February.
The Seller Activity Index: 3-Month Outlook held steady in March. The index was 40 this month, unchanged from February. However, the outlook for seller activity remains weak. Only 18% of Virginia REALTORS® reported that they think seller activity will be strong in three months, which is down from 20% of respondents last month.
Survey respondents continue to expect prices to rise in their local markets in the next three months. Nearly seven out of ten Virginia REALTORS® responding to the survey (68%) expect prices will rise. About one in ten REALTORS® responding to the survey (10%) said they think home prices are set to fall over the next three months.
Virginia REALTORS® Confidence Survey: 2022 Highlights
|Key Indicators||Jan 2022||Feb 2022||March 2022|
|Buyer Activity Indexa||76||78||84|
|Seller Activity Indexa||20||19||20|
|Buyer Activity Index: 3-Month OutlookB||83||77||75|
|Seller Activity Index: 3-Month OutlookB||43||40||40|
|Current Market Conditions|
|First-time Homebuyers, as a Percent of All Sales||29||32||33|
|Cash Sales, as a Percent of All Sales||18||18||18|
|Sales as Non-Primary Residence, as a Percent of All Sales||21||14||16|
|Average Number of Offers, Most Recent Transaction||4.1||6.3||6.6|
|Percent of Respondents Who Expect Strong Buyer Activity in 3 Months||70||63||59|
|Percent of Respondents Who Expect Strong Seller Activity in 3 Months||19||20||18|
|Percent of Respondents Who Expect Prices to Rise in 3 Months||64||69||68|
|Percent of Respondents Who Expect Prices to Fall in 3 Months||7||8||10|
|Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months||26||21||18|
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%.
Responses to our surveys are confidential. We do not look at individual responses but rather report data in the aggregate.
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