Virginia’s housing market softened during the first quarter of 2014, according to the Federal Reserve Bank of Richmond’s recent survey of more than 1,400 members of the Virginia Association of Realtors.
The online survey, conducted between May 5 and 16, specifically showed that 42 percent of respondents considered the housing market conditions significantly or slightly worse in the first quarter of 2014 compared to the first quarter of 2013, while 36 percent said conditions had improved. This is a noticeable change from the 2013 survey in which 71 percent of respondents indicated conditions were significantly or slightly better than in 2012. The Fed survey was conducted previously in April of 2013 and 2012.
“Housing market conditions in the first quarter of the year were not as strong as in recent years, making the outlook significantly softer,” said Andy Bauer, senior regional economist for the Richmond Fed.
Bauer cited weather as a factor in the softening of housing sales. The survey showed 49 percent of respondents considered the weather had “somewhat” impacted sales negatively, while another 29 percent noted it had “greatly” impacted sales. More than 50 percent of the respondents also experienced less customer foot traffic.
“The severe weather early in the year was a factor, although that tended to subside in the spring,” Bauer said. However, there was little improvement once spring arrived; 44 percent of survey respondents characterized market activity in April as “weak” or “somewhat weak” while only 28 percent considered it “strong” or “somewhat strong.”
The survey did show several bright spots, particularly in four critical areas affected by the recession, Bauer explained. These areas included the impact of distressed homes on prices, appraisals, tighter underwriting preventing sales and buyer difficulty in obtaining financing. For example, when asked whether distressed homes were a factor in pricing, 40 percent of realtors responded “not at all” in 2014, compared to 27 percent in 2013 and 8 percent in 2012. Other highlights include:
“We continue to see improvements in these critical areas,” Bauer said.
The full survey, including a breakdown of the responses by region, is available at richmondfed.org.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.