Virginia Home Prices Climb Despite Slowing Sales
March 22, 2023 - Robin Spensieri
Welcome Virginia REALTORS®
By Abel Opoku-Adjei – 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 February 21st and February 28th, 2023, and reflects housing market conditions in Virginia in February 2023. A total of 529 Virginia REALTORS® members responded to the survey, including 379 who had participated in a home sales transaction in the last 28 days.
Current Market Conditions
According to Virginia REALTORS®, buyer activity increased in February. The Buyer Activity Index for the month was 56, an increase from January at 39. This is the highest buyer activity has been since May 2022. In February, about 35% of REALTORS® rated the level of buyer activity in their local markets as “high” or “very high”, and about 22% of REALTORS® rated buyer activity in their local market as “low” or “very low”.
According to survey respondents, about 25% of buyers in February were first-time home buyers, a 7% decrease from last month. In February, roughly 23% of respondents accepted an all-cash purchase, which is down from 19% in January. This month, there were about 20% of non-primary residence sales (e.g., rental property, second home, vacation home), 2% more than January.
The average number of offers increased from January to February, according to REALTORS® responding to the Confidence Survey. Recent transactions received an average of 2.2 offers in February, a slight increase from 1.3 offers on average in January. For the month of February, about 42% of respondents stated that offers were coming in above the listing price, a big jump from 24% in January.
Seller activity rose in February, according to Virginia REALTORS®. In February, the Seller Activity Index was 15, down from 19 in January. About 4% of REALTORS® reported that seller activity was “high to very high” in their local market, down 1% compared to last month. About 74% of respondents reported that seller activity was “low to very low” in February, an increase from January when it was 68%.
Confidence in future home buyer activity increased in February compared to last month. This index gauges how REALTORS® think the market will perform in the following three months. This index rose to 61 in February, up from 52 in January. Roughly 39% of respondents indicated that they thought buyer activity would be strong in the next three months in their local markets, an increase from 28% in January.
The Seller Activity Index: 3-Month Outlook decreased in February. The Seller Activity Index this month was 32, a fall from 37 in January. Around 10% of Virginia REALTORS® reported that they think seller activity will be strong in three months, increasing by 3% from a month ago.
The share of survey respondents who expect prices to rise in their local markets in the next three months increased in February. About 37% of Virginia REALTORS® responding to the survey stated that they believe prices will increase within the next three months. Roughly 30% of REALTORS® believe that home prices will begin to fall within the next three months. Around 31% of survey respondents indicated that prices would most likely remain the same for the next three months.
Virginia REALTORS® Confidence Survey: 2023 Highlights
|Buyer Activity Indexa||39||56|
|Seller Activity Indexa||19||15|
|Buyer Activity Index: 3-Month Outlookb||52||61|
|Seller Activity Index: 3-Month Outlookb||37||32|
|Current Market Conditions|
|First-time Homebuyers, as a Percent of All Sales||32||25|
|Cash Sales, as a Percent of All Sales||19||23|
|Sales as Non-Primary Residence, as a Percent of All Sales||18||20|
|Average Number of Offers, Most Recent Transaction||1.3||2.2|
|Percent of Respondents Who Expect Strong Buyer Activity in 3 Months||28||39|
|Percent of Respondents Who Expect Strong Seller Activity in 3 Months||12||10|
|Percent of Respondents Who Expect Prices to Rise in 3 Months||22||37|
|Percent of Respondents Who Expect Prices to Fall in 3 Months||44||31|
|Percent of Respondents Who Expect Prices to Remain Unchanged in 3 Months||33||31|
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 +/- 4.3%.
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.
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