Agents Showing Optimism About Virginia Housing Market


An April survey of Virginia real estate professionals, conducted by the Federal Reserve Bank of Richmond and the Virginia Association of Realtors, uncovered optimism that the real estate market is improving. While distressed properties, short sales and foreclosures, are still hampering a stronger recovery, 60 percent of the almost 1,500 Virginia agents surveyed believed that conditions were either “slightly” or “significantly better” than the past five years.


Residential Homes and First Time Buyers

While a Federal Reserve economist admits that the residential market has not yet fully recovered, first time homebuyers are playing a significant role in improving sales of mid- and lower-priced homes. First time buyers represent more than 50 percent of all recent Virginia sales.

Although high-end properties remain stuck in neutral, accounting for less than 10 percent of home sales, low mortgage rates are attracting first time homebuyers to more affordable properties. Almost 67 percent of recent home sales are in the middle to lower range of the price scale. First time homebuyers represent the majority of this home sale renaissance.


Mortgage Loan Qualification Standards Remain Tight

Along with homebuyers, real estate professionals are still a bit frustrated by the stricter mortgage loan qualifications put in place during the height of the recession. The majority of real estate agents responded that these qualification restrictions either “occasionally” or “frequently” hampered sales efforts.

While veteran homeowners and real estate agents realize the need for lenders to avoid a replay of the “wild ride” of the early 2000s, where there was a mortgage for every buyer, the ever-tighter mortgage loan approval restrictions are slowing down a stronger housing recovery. Most prominent mortgage lenders are committed to improving the quality of their home loans to avoid a repeat of the former free-wheeling period.


Optimism Helps Buyers and Sellers

The past five years in the housing market has served to better explain (tongue firmly planted in cheek) the humorous comment of baseball Hall of Famer, Yogi Berra, who allegedly said, “That place is so crowded, nobody goes there anymore.” The homes-for-sale market had too many available houses, many of which were distressed properties, and too few buyers.

This overabundant inventory is finally declining. Supply and demand theory dictates that, as the supply of “something” decreases, while demand increases, or remains constant, the price of the “something” increases. The optimism of Virginia real estate professionals is well-founded. Their optimism also helps fuel housing market improvement.

Sellers benefit as more buyers enter the market, helping drive prices upward. Buyers also benefit, as better-quality homes and less-pressured sellers give first time and veteran homebuyers better choices. As the Virginia housing market continues to improve, local buyers and sellers will adopt a positive outlook similar to area real estate professionals.



6 years ago by in Virginia | You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.
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