Mortgage Rates Come Down, Purchasing Power Goes Up
October 7, 2024 - Abel Opoku-Adjei
Welcome Virginia REALTORS®
By Dominique Fair – Research Associate, 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 25, 2023 and January 30, 2023, and reflects housing market conditions in Virginia in January 2023. A total of 562 Virginia REALTORS® members responded to the survey, including 389 who had participated in a home sales transaction in the prior 30 days.
Current Market Conditions
Buyers
According to Virginia REALTORS®, buyer activity increased in January. The Buyer Activity index for the month was 39, jumping from 24 in December. Roughly 17% of REALTORS® rated the level of buyer activity in their local markets as “high” or “very high” in January, while 38% of REALTORS® rated buyer activity as “low” or “very low” in their local market.
Around 32% of buyers in January were first-time homebuyers, according to survey respondents, up 4% from last month. About 19% of purchases in January were all-cash purchases, down from 22% in December. In January, there were about 18% of non-primary residence sales (e.g., rental property, second home, vacation home), a decrease from 22% last month.
The average number of offers remained unchanged from last month according to REALTORS® responding to this month’s survey. Recent transactions received an average of 1.3 offers in January. About 24% of respondents indicated that offers were coming in above the list price in January, down from 26% in December.
Sellers
Seller activity slightly increased in January, according to Virginia REALTORS®. In January, the Seller Activity Index was 19, up from 17 in December. Roughly 5% of respondents reported that seller activity was “high to very high” in their local market, an increase from last month when it was 2%. About 68% of REALTORS® reported that seller activity was “low to very low,” unchanged from December.
Market Outlook
Confidence in future home buyer activity increased this month compared to last month. This index gauges how REALTORS® think the market will be performing in three months’ time. The index rose to 52 in January, up from 38 in December. Roughly 28% of respondents indicated that they thought buyer activity in three months would be strong in their local markets, up from 12% last month.
The Seller Activity Index: 3-Month Outlook grew in January. The index was 37 this month, rising from 33 in December. Around 12% of Virginia REALTORS® reported that they think seller activity will be strong in three months, an increase from last month which was 7%.
The share of survey respondents who expect prices to rise in their local markets in the next three months went up in January. About 22% of Virginia REALTORS® responding to the survey stated that they believed prices will begin to rise. The largest share, 44% of respondents, believe that home prices will fall in the next three months. Another 33% of respondents expected prices to remain unchanged.
Virginia REALTORS® Confidence Survey: 2022 Highlights
Key Indicators |
Jan 2022 |
Feb 2022 |
Mar 2022 |
Apr 2022 |
May 2022 |
June 2022 |
July 2022 |
Aug 2022 |
Sep 2022 |
Oct 2022 |
Nov 2022 |
Dec 2022 |
Jan 2023 |
Buyer Activity Indexa | 76 | 78 | 84 | 71 | 56 | 48 | 43 | 39 | 29 | 23 | 21 | 24 | 39 |
Seller Activity Indexa | 20 | 19 | 20 | 26 | 33 | 31 | 33 | 29 | 27 | 21 | 20 | 17 | 19 |
Buyer Activity Index: 3-Month Outlookb | 83 | 77 | 75 | 61 | 45 | 39 | 41 | 42 | 25 | 22 | 30 | 38 | 52 |
Seller Activity Index: 3-Month Outlookb | 43 | 40 | 40 | 41 | 42 | 42 | 40 | 39 | 30 | 26 | 30 | 33 | 37 |
Current Market Conditions | |||||||||||||
First-time Homebuyers, as a Percent of All Sales | 29 | 32 | 33 | 30 | 30 | 27 | 29 | 28 | 32 | 24 | 24 | 28 | 32 |
Cash Sales, as a Percent of All Sales | 18 | 18 | 18 | 21 | 16 | 16 | 19 | 22 | 19 | 21 | 28 | 22 | 19 |
Sales as Non-Primary Residence, as a Percent of All Sales | 21 | 14 | 16 | 19 | 15 | 15 | 17 | 18 | 18 | 20 | 22 | 22 | 18 |
Average Number of Offers, Most Recent Transaction | 4.1 | 6.3 | 6.6 | 5.3 | 2.9 | 3.1 | 1.8 | 1.7 | 1.7 | 1.8 | 1.5 | 1.3 | 1.3 |
Market Outlook | |||||||||||||
Percent of Respondents Who Expect Strong Buyer Activity in 3 Months | 70 | 63 | 59 | 36 | 18 | 13 | 11 | 12 | 6 | 6 | 8 | 12 | 28 |
Percent of Respondents Who Expect Strong Seller Activity in 3 Months | 19 | 20 | 18 | 16 | 14 | 12 | 9 | 9 | 6 | 3 | 4 | 7 | 12 |
Percent of Respondents Who Expect Prices to Rise in 3 Months | 64 | 69 | 68 | 43 | 32 | 19 | 18 | 14 | 9 | 7 | 9 | 14 | 22 |
Percent of Respondents Who Expect Prices to Fall in 3 Months | 7 | 8 | 10 | 25 | 33 | 49 | 53 | 51 | 66 | 72 | 67 | 55 | 44 |
Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months | 26 | 21 | 18 | 28 | 32 | 30 | 26 | 30 | 23 | 20 | 22 | 29 | 33 |
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 +/- 4.1%.
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.
October 7, 2024 - Abel Opoku-Adjei
September 27, 2024 - Virginia REALTORS®
September 24, 2024 - Dominique Fair