Rising Economic Uncertainty Raises Concerns Among Virginia REALTORS^® Clients as Buyer Outlook Falls

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 February 27th, 2025, and March 5th, 2025, and reflects housing market conditions in Virginia in February 2025. A total of 424 Virginia REALTORS^® members responded to the survey, including 253 who participated in a home sales transaction in the past month.

Current Market Conditions

Buyers

According to the survey, buyer activity in Virginia remained stagnant between January and February. The Buyer Activity Index in February was 42, unchanged from the previous month. About 20% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in February, and 37% of REALTORS^® rated buyer activity in their local market as “low” or “very low”.

Results From Virginia REALTORS^® Confidence Survey

According to survey respondents, 32% of REALTORS^® stated their most recent transaction in February involved a first-time home buyer, up from 26% in January. Roughly 19% of recent home sales in February were all-cash purchases, down from 25% last month. Nearly 18% of REALTORS^® stated their recent transaction in February involved a non-primary residence (e.g., rental property, second home, vacation home), a 2% drop from the prior month.

Recent transactions received an average of 1.9 offers in February, slightly lower from 2 in January. About 32% of REALTORS^® reported that bids in February came in above the listing price, up from 27% in January.

Sellers

Seller activity increased slightly from January to February in Virginia, according to REALTORS^®. The Seller Activity Index in February was 28, up one from a month ago. Around 8% of REALTORS^® reported that seller activity was “high to very high” in their local market, and 52% of respondents said seller activity was “low to very low.”

Obstacles

Buyers

The survey revealed that 33% of respondents identified limited housing inventory as a major barrier for their clients. Approximately 14% pointed to high interest rates as the primary factor preventing purchasers from buying a home in February. Around 5% of REALTORS^® noted that clients had difficulties saving for a down payment. Many buyers are encountering several of these challenges simultaneously due to the current economic climate.

Results From Virginia REALTORS^® Confidence Survey

Sellers

According to the February survey, 18% of Virginia REALTORS^® reported that their seller clients hesitated to move due to worries about losing their low interest rates. The survey revealed that 12% of REALTORS^® noted their clients had difficulty finding suitable homes because of limited inventory in the market, while roughly 11% indicated that increasing home prices were the primary challenge their clients faced in selling their homes during February. A significant number of sellers encountered a mix of these challenges.

Results From Virginia REALTORS^® Confidence Survey

Pending Sales Activity

In January, Virginia recorded 5,879 pending sales, which is 642 less than the previous year, showing a 9.8% decline. Although most pending sales typically close successfully, there are consistent reasons for some not closing. In February, 203 real estate agents in Virginia indicated that at least one of their seller clients had a purchase agreement, and out of these, 48 agreements failed to close as intended.

In February, we surveyed REALTORS^® about the leading causes of pending sales falling through this month. Almost 40% identified inspection problems as the main reason for the failure of purchase agreements, while 14% pointed to appraisals coming in too low. Approximately 25% reported that buyers’ homes failed to sell in time to seal the sale. Additionally, 9% of REALTORS^® noted that buyers either lost their jobs or faced financial issues that impacted their mortgage approval.

Reasons For Selling

Results From Virginia REALTORS® Confidence Survey

About 19% of REALTORS^® reported that their seller clients were moving out of Virginia in February. Virtually 11% indicated that clients were considering relocating to another area within Virginia. Approximately 22% of REALTORS^® noted that their clients were looking to downsize in their current location, while 15% of REALTORS^®’ clients were seeking larger homes in the same locality in February. Finally, around 11% mentioned that their clients were selling a second home this month.

Market Outlook

Results From Virginia REALTORS^® Confidence Survey

The outlook on future housing activity remained the same as the prior month. This index measures REALTORS^®’ expectations for market performance over the next three months. The three-month buyer activity index in February dropped sharply to 52 from 60 in January. Nearly 27% of respondents believe that buyer activity will increase in their local markets over the next three months, while 24% think it will decline.

The Seller Activity Index (3-Month Outlook) experienced a slight decrease from January to February, landing at 48. Approximately 20% of Virginia REALTORS^® forecast an increase in seller activity over the next three months, while 25% predict a decline from March through May.

Finally, about 49% of Virginia REALTORS^® participating in the survey expect home prices to rise in the next three months. Nearly 26% predict that prices will remain steady between March and May, while 19% believe prices will fall.

Virginia REALTORS^® Confidence Survey: 2025 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^®. The statistics from this survey have a margin of error of +/- 4.76%.

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.