Buyer Activity Rose Compared to The Prior Month According to Virginia REALTORS® As Mortgage Rates Became More Favorable for 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 September 26th and October 3rd, 2024, and reflects housing market conditions in Virginia in September 2024. A total of 679 Virginia REALTORS^® members responded to the survey, including 501 who had participated in a home sales transaction in the past month.

Current Market Conditions

Buyers

Results from the survey indicated that buyer activity increased from August to September. The Buyer Activity Index in September was 37, up from 35 the prior month. Virtually 15% of REALTORS^® rated the level of buyer activity in their local markets as “high” or “very high” in September, and 40% of REALTORS^® rated buyer activity in their local market as “low” or “very low”.

Results From Virginia REALTORS^® Confidence Survey

Regarding their most recent transaction, 28% of survey respondents said the transaction involved a first-time home buyer, a 1% increase compared to August. Roughly 23% of recent sales transactions in September were all-cash purchases, one percent lower than the prior month. Around 20% of REALTORS^® stated their recent transaction in September involved a non-primary residence (e.g., rental property, second home, vacation home), down one percentage point from August.

Recent transactions received an average of 1.9 offers in September, slightly lower from 2.2 the previous month. Approximately 34% of respondents in September stated that bids came in above the listing price, unchanged from the previous month.

Sellers

Seller activity fell short from August to September, according to REALTORS^® in Virginia. The Seller Activity Index in September was 27, down from 28 in August. About 6% 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

Approximately 39% of Virginia REALTORS^® answered that the lack of housing in their local market was a significant issue for their clients, and 10 % of Virginia REALTORS^® stated that rising mortgage rates were holding their buyer clients back from purchasing a home in September. Many potential buyers face a combination of these obstacles while buying a home. More buyers are entering the market as mortgage rates trend downwards, but many of them will struggle in a competitive market as supply levels remain low.

Results From Virginia REALTORS® Confidence Survey

Sellers

About 12% of Virginia REALTORS^® indicated in the survey that their seller clients were unwilling to move because they would lose their low interest rate, and about 13% confirmed that the lack of supply in Virginia negatively impacted their sellers’ willingness to move in September. Roughly 14% of REALTORS^® relayed that home prices were their clients’ biggest impediment to selling their property in September because they were worried they wouldn’t be able to get a similar home within their budget. Inventory constraints have been tightened by many homeowners who have locked in low rates during the pandemic period. As rates begin to drop, more homeowners will be encouraged to list their homes on the market.

Results From Virginia REALTORS^® Confidence Survey

Pending Sales Activity

In August, there were 8,331 pending sales across the state, which is 385 more than the prior year (+4.8%). Pending sales tend to close successfully, but there has been a common trend as to why pending sales have failed to close. According to the September survey, 406 realtors stated that one or more of their seller clients had a purchase agreement, and 116 answered 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 September. Around 41% of respondents confirmed that there were inspection issues that caused the purchase agreement to fail. About 17% stated that the buyer’s mortgage was not approved in time for closing. Approximately 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. About 22% said the appraisal was too low and hindered the deal from closing.

Reasons For Selling

Results From Virginia REALTORS^® Confidence Survey

Trends for why Virginia residents decided to sell their houses remained similar in September compared to August. According to the September survey, 23% of REALTORS^® in Virginia relayed that their seller clients were moving out of Virginia, and 13% of people were looking to relocate somewhere else within the state. Nearly 19% were looking to downsize within the same area they live in, and 15% were looking for a bigger house within the same area. About 9% of REALTORS^® said their clients were looking to sell their second home in September.

Market Outlook

Results From Virginia REALTORS^® Confidence Survey

Confidence in the buyer outlook increased for the second consecutive month in September, 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 September was 49, an increase from 47 in August. Virtually 22% of respondents indicated that they think buyer activity will be higher in the next three months in their local markets, and 25% stated that they believed buyer activity would drop in the next three months.

The Seller Activity Index: 3-Month Outlook decreased from August to September. The Seller Activity Index in September was 37, down from 40 in August. Around 10% of Virginia REALTORS^® reported that they think seller activity will be higher in three months, and 35% said it would be lower.

About 30% of Virginia REALTORS^® responding to the survey stated that prices will rise within the next three months. Nearly 29% of REALTORS^® believe that home prices will decrease between September and November, and 35% 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 +/- 3.761%.

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.