Virginia REALTORS^® Anticipate Rising Home Prices Amid Ongoing Economic Uncertainty

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 January 25th, 2025, and February 4th, 2025, and reflects housing market conditions in Virginia in January 2025. A total of 551 Virginia REALTORS^® members responded to the survey, including 339 who participated in a home sales transaction in the past month.

Current Market Conditions

Buyers

REALTORS^® in Virginia reported a rise in buyer activity from December to January. The Buyer Activity Index in January was 42, up from 38 in December. Approximately 18% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in January, and 35% of REALTORS^® rated buyer activity in their local market as “low” or “very low”.

Results From Virginia REALTORS^® Confidence Survey

In the survey, 26% of survey respondents stated their most recent transaction involved a first-time home buyer, unchanged compared to December. Around 25% of recent home sales in January were all-cash purchases, also the same as last month. Roughly 20% of REALTORS^® stated their recent transaction in January involved a non-primary residence (e.g., rental property, second home, vacation home), down one from December.

Recent transactions received an average of 2 offers in January, up from 1.8 in December. Nearly 27% of REALTORS® reported that bids in January came in above the listing price, down three compared to the previous month. 

Sellers

Seller activity increased from December to January in Virginia, according to REALTORS^®. The Seller Activity Index in January was 27, up 5 compared to December. About 5% of REALTORS^® reported that seller activity was “high to very high” in their local market, and 51% of respondents said seller activity was “low to very low.”

Obstacles

Buyers

According to the survey, 39% of survey respondents stated that the lack of available inventory in their housing market was a significant obstacle for their clients. About 21% reported that current interest rates were the main reason their clients were unable to purchase a home in January. Around 3% of REALTORS^® indicated that their clients struggled to save for a down payment. Due to current economic conditions many buyers are facing a handful of these issues all together.

Results From Virginia REALTORS® Confidence Survey

Sellers

In January 16% of Virginia REALTORS^® stated that their seller clients were not willing to move in January due to concerns about losing their low interest rates. According to the survey results, 14% of REALTORS^® indicated that their clients struggled to find a suitable home due to a lack of inventory in the market, and about 10% of REALTORS^® indicated that rising home prices were the main reason their clients struggled to sell their homes in January. A noticeable portion of sellers faced a combination of these obstacles in January.

Results From Virginia REALTORS^® Confidence Survey

Pending Sales Activity

Virginia reported 5,649 pending sales in December, 548 more than a year ago, marking a 10.7% increase. While pending sales usually close successfully, there are common reasons why some do not. In January, 316 realtors reported that one or more of their seller clients had a purchase agreement, and 61 of those agreements did not close as planned.

We asked REALTORS^® about the most common reasons causing the pending sales to fall through in January. Nearly 45% of REALTORS^® indicated that inspection issues were the primary reason the purchase agreement failed and 20% stated the appraisal came too low. Roughly 33% noted that the buyer’s mortgage application was not approved. Lastly, 10% of REALTORS^® mentioned that the buyer lost their job or encountered financial difficulties that hindered their mortgage approval

Reasons For Selling

Results From Virginia REALTORS^® Confidence Survey

According to the survey results, approximately 20% of REALTORS^® stated that their seller clients were moving out of Virginia. About 14% indicated that clients were considering relocating to a different area within Virginia. Around 19% of REALTORS^® noted that their clients were looking to downsize within their current location, while 16% of REALTORS^® clients were looking for bigger homes in the same locality in January. Lastly, around 10% mentioned that their clients were trying to sell 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 January was 60, unchanged from the previous month. Nearly 35% of respondents believe that buyer activity will increase in their local markets within the next three months, and 15% believe buyer activity will drop.

The Seller Activity Index (3-Month Outlook) stayed the same from December to January, with an index of 49. About 20% of Virginia REALTORS^® expect seller activity to rise in the next three months, while 23% anticipate it to drop.

Lastly, about 51% of the Virginia REALTORS^® stated in the survey expect home prices to increase in the next three months. Virtually 28% predict that prices will stay stagnant between February and April, and 16% believe prices will drop.

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 +/- 3.88%.

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.