Virginia REALTORS^® Are Optimistic About Future Sales Activity Compared to the Prior Month as Mortgage Rates Trend Downwards. However, Lack of Inventory in the State Is Still an Obstacle for Many of Their Clients.

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 August 30th and September 5th, 2024, and reflects housing market conditions in Virginia in August 2024. A total of 497 Virginia REALTORS^® members responded to the survey, including 363 who had participated in a home sales transaction in the past month.

Current Market Conditions

Buyers

Results from the survey indicated buyer activity decreased in August compared to July. The Buyer Activity Index in August was 35, down from 39 the prior month. Around 13.5% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in August, and 44% of REALTORS^® rated buyer activity in their local market as “low” or “very low”.

According to REALTORS^® in Virginia, 27% stated that their most recent transaction this month involved a first-time home buyer, a slight decline from 28% in July. About 24% of recent sales transactions in August were all-cash purchases, one percent lower than the previous month. Roughly 21% of REALTORS^® in the state dealt with a non-primary residence transaction (e.g., rental property, second home, vacation home) in August, up three percentage points from July.

Recent transactions received an average of 2.2 offers in August, unchanged from a month ago. Around 34% of respondents in August stated that bids came in above the listing price, which is 5% lower than the previous month.

Sellers

Seller activity rose slightly from July to August, according to survey respondents. The Seller Activity Index in August was 28, up from 27 in July. About 4% of REALTORS^® reported that seller activity was “high to very high” in their local market, and 47% of respondents said seller activity was “low to very low.”

Obstacles

Buyers

Many buyers feel constrained by the lack of inventory in the market, but the demand for housing is still high. Around 36% of Virginia REALTORS^® relayed that the lack of housing in the state was a significant issue for their clients, and 19 % of Virginia REALTORS^® stated that rising mortgage rates were holding their buyer clients back from purchasing a home in August. A large pool of buyers continue to face a multitude of these obstacles during their journey of buying a home.

Sellers

According to the survey, approximately 16% of Virginia REALTORS^® indicated that their seller clients were unwilling to lose their low-interest rate for a higher rate during the month of August, and about 16% confirmed that the lack of supply in Virginia negatively impacted their sellers’ willingness to move. Virtually 15% of REALTORS^® said that rising home prices were stopping seller clients from selling their homes this month because they were worried that they would not get the same type/size of a home elsewhere in their budget.

Pending Sales Activity

According to our July Home Sales Report, there were 8,643 pending sales, 326 more than a year ago, showing a 3.9% increase. Most pending sales tend to close successfully, but there has been a common trend as to why pending sales have failed to close. In August, 335 realtors in Virginia stated that one or more of their seller clients had a purchase agreement, and 91 said that the purchase agreement didn’t close as intended.

We asked REALTORS^® what the most common reason was for the pending contract to fall through in August. Roughly 39% of respondents confirmed that there were inspection issues that caused the purchase agreement to fail. Virtually 16% stated that the buyer’s mortgage was not approved in time for closing. Nearly 14% said that the buyer’s old home could not sell in time for them to finalize the purchase agreement, and 13% of REALTORS^® noted that the buyer lost their job or faced financial issues jeopardizing the mortgage approval. Around 11% said there were issues within the title, which caused the pending sale to collapse.

Reasons For Selling

Results From Virginia REALTORS® Confidence Survey

Survey respondents stated what was the most common reason their seller clients wanted to sell their homes in August. According to the survey data, 22% of REALTORS^® in Virginia stated that their seller clients were moving out of Virginia, and 13% of people were looking to relocate somewhere else within the state. Around 20% were looking to downsize within the same area they live in, and 12% were looking for a bigger house within the same area. There were about 9% of sellers who were looking to sell their second home in August.

Market Outlook

Confidence in future buyer activity fell for the second consecutive month in August, according to REALTORS^®. This index gauges how REALTORS^® think the market will perform in the following three months. The three-month buyer activity index in August was 47, an increase from 44 in July. About 20% of respondents indicated that they think buyer activity will be strong in the next three months in their local markets, and 26% stated that they believed buyer activity would drop in the next three months.

The Seller Activity Index: 3-Month Outlook increased from July to August. The Seller Activity Index in August was 47, up from 44 in July. Around 9% of Virginia REALTORS^® reported that they think seller activity will be strong in three months, and 30% said it would be low.

Approximately 33% of Virginia REALTORS^® responding to the survey stated that prices will rise within the next three months. About 29% of REALTORS^® believe that home prices will decrease between August and October, and 34% of respondents indicated that prices would remain the same.

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^®. These statistics from this survey have a margin of error of +/- 4%.

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.