Virginia Real Estate Index: Sentiments rebound from modest dip, concerns in Southwestern Virginia

ROANOKE, Va., Feb. 24, 2015 /PRNewswire/ -- Consumer sentiment concerning the Virginia real estate market remains strong, accelerating after a modest dip at the end of 2014, according to the latest poll conducted by the Institute for Policy and Opinion Research at Roanoke College. Respondents are split over the direction of mortgage rates in the coming year, leading to an ambiguous impact on the market. Sellers appear concerned about the coming year in Southwest Virginia, potentially due to an anticipated surplus of homes from residents who are relocating as a result of Norfolk Southern's closure in Roanoke.  

Overall, sentiment about the condition of the Virginia real estate market has rebounded since the final quarter of 2014, with close to 33 percent more respondents feeling optimistic than pessimistic about the market today. Over 34 percent more are optimistic over the course of the coming year. Sixty percent of Virginians believe that the condition of the real estate market has improved since last year, while 16 percent believe that it has worsened; 52 percent believe that conditions will improve over the next year, a two point decrease from last quarter. Twelve percent believe that the market will decline in the coming year, down two points since last quarter.

Sales prices and other real estate market outcomes depend upon a variety of factors influencing homebuyers and sellers. Several positive items are likely playing a role, such as the strong Virginia labor market and low costs for goods and services. Housing inventories are increasing in many areas of the Commonwealth, likely due to fears of future rate hikes. Low inventories are a boon to sellers and drive real estate prices up as homebuyers compete for the few available listings.

Buying and selling optimism is influenced by several factors. Low mortgage rates are the primary reason given for selling optimism, followed by higher housing prices and falling inventories. Higher insurance costs and a tight credit market are also deterring factors, but sellers appear equally optimistic about selling today versus a year from now.

Twenty-three percent more respondents believe that the coming year will be a good time to sell a home, compared to those who don't. The leading reason for optimism among buyers is lower mortgage rates.

For more information, including methodology, click here.

SOURCE Roanoke College