The real estate market is unpredictable to the point of sometimes being volatile. But there are ways to track trends and learn from what’s happened in the past to forecast major shifts we could see in the near future.
There are some great real estate charts out there that can help paint a picture of what the market looks like now, what current trends are telling us about what’s around the corner, and where we could be headed.
Here are 17 real estate charts that can help you understand the market as it is now and what might be lurking down the road. And sharing these charts will give you the added bonus of looking like a superhero in front of clients. You’ll shine as the local expert when you can confidently address your buyers’ and sellers’ concerns.
1. The Homeselling Frenzy Is Officially Over
We can see from this real estate chart from the National Association of Realtors that home sales continue to slow way down heading into 2023. That’s not exciting news for homesellers, but it could be good for buyers as they start to re-enter the market.
Due to escalating home prices and mortgage rates, many buyers postponed their homeownership dreams and stepped out of the market midway through 2022. That doesn’t mean sales are non-existent—it just means the bidding war season is kaput.
2. It’s Not All Doom & Gloom for Sellers
As it turns out, the real estate market is still strong for sellers too. It may not be as crazy as 2021, but homeowners still clocked a national average of $34,300 in equity gains in Q3 2022.
3. Home Prices Returning to Earth
In November 2022, the median price of existing homes for sale returned from the stratosphere. That’s a good sign for buyers who have been sitting on the sidelines waiting for the opportunity to jump back into the homebuying process.
It’s no secret at this point that, with the steep increases in interest rates set by the Fed, buyers have been a little leerier about buying in this market. But as inflation calms down, buyers can see the light at the end of the tunnel.
4. Get in Now to Rake in That Future Equity
This real estate chart from Keeping Current Matters is still my favorite from 2022. If you have a client asking if now is the right time to buy or if they should wait, this is the perfect visual to show them.
This graph shows how much equity you stand to gain if you buy a house today. It shows the potential growth in household wealth over the next five years based on the projected appreciation of the home. For example, if your buyer bought a house in 2022 at $360,000, the projected amount of home equity she stands to earn is almost $100,000 by 2027.
If that’s not enough incentive to move forward with a home purchase, nothing is.
5. Our Needs Are Changing
This chart derived from a Gallup survey lays out the difference between pre-pandemic and today’s work-from-home demands. But what does it mean for real estate? As more companies offer flexible work options, fewer consumers feel obligated to buy real estate near a specific workplace. With the increase in flexibility, it’s easier to live where you want and work anywhere.
This opens up so many new options. If people can live and work from anywhere, real estate becomes less about convenience and more about desire. Think of it this way: If you could live anywhere you wanted to live—near friends, family, the beach, the mountains—and still have your job, where would you go? The possibilities are endless.
6. Mortgage Rate Predictions Have Leveled Out
For buyers who have been locked out of the housing market since last year, things are starting to look normal again to all the major housing authorities. From the National Association of Realtors to Fannie Mae and Freddie Mac to Wells Fargo, everyone is seeing mortgage rates level out.
That could give sidelined buyers some breathing room and motivate them to start their home search over again.
7. The Future Looks Promising for Mortgage Rates
This real estate chart from The Mortgage Reports actually shows mortgage rate projections trending downward through the first 90 days of the year. That gives buyers a chance to settle in with the current rates, adjust their game plan, and get back out there.
What does that mean for real estate agents? There’s an opportunity to capture a lot more business, especially as a flurry of millennial first-time homebuyers enters the marketplace.
8. House Flipping Is Hard
Redfin recently announced that it’s shutting down its house-flipping business due to financial losses. Zillow had already bolted from the flipping game, and Opendoor isn’t doing much better. These huge companies, which used iBuyer tech to buy up, renovate, and resell homes, have been making life harder for some homebuyers due to limited inventory. But with the shift in profitability for these companies, more buyers may have a better chance at getting into homes they couldn’t before.
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9. 2021 Was Bizarre
This real estate chart from Mike DelPrete puts 2021 (and early 2022) into perspective. When you look at this chart, you can see that 2022 was actually a pretty normal year for home sales. It only seems bleak when you put it up against 2021, which was abnormally high.
What does that mean for the real estate industry? It means the real estate market, by and large, is in the middle of a correction. We’re returning to normal and things are actually looking more positive than negative.
10. Buyers Are Reevaluating Their Options
In this real estate chart, another from Keeping Current Matters, it’s easy to see what is keeping would-be buyers on the sidelines. As the mortgage rates increase, they have less buying power than they did before.
Check out the difference in monthly mortgage payments on a home loan of $400,000 from the 6% mark to the 7% mark—that’s a more than $250 increase in monthly payments!
Buyers have seen their dreams dashed as their buying power eliminated them from the running for the homes of their choice. But we hope that, after retreating for a bit and licking their wounds, commonsense buyers with more reasonable expectations should reemerge in 2023.
11. Inflation vs Savings
Inflation has taken its toll on American savings in the past year, which could hurt some buyers’ ability to purchase a home. As of the end of 2022, Americans were only saving an average of 2.3% of their disposable income, as opposed to 20% to 35% during the peak of the pandemic lockdowns.
What can you do as an agent? Coach your future buyers now to start putting away that extra cash, forego some luxuries, and save up for their down payment starting now.
12. Inventory Is Down
Inventory, across the board, is still historically low, which generally indicates we’re not headed for a crash anytime soon. As long as demand outpaces supply on the market, real estate should remain healthy.
And buyers are still buying homes. They have had to make some concessions as to what they can afford to buy, but they are still moving. That’s great news for agents who are excited to work with buyers, especially at this slower pace.
13. Homebuilders Gotta Build
Higher than usual prices on building materials, supply chain disruptions, and labor shortages have all put constraints on homebuilders as they try to meet increased demand.
However, builders are still building new homes, just at a slower pace than in previous years. The market is cooling, but it’s certainly not dying. The demand is still there and new construction won’t outpace that demand any time soon.
That’s good news because it means we will continue to have a healthy, stable real estate market. As long as supply doesn’t exceed demand, which looks unlikely in the near term, we shouldn’t have another crash.
14. Hardwood Floors, for the Win!
Switching gears, I find this real estate chart showing the cost recovery on renovation projects insightful. If your sellers want to know the best investment for their money on repairs before listing, you can’t go wrong with wood flooring, apparently.
But don’t overlook adding a new primary bedroom suite. Because yes, multigenerational housing is making a comeback.
15. Good News! Competition Is Low
This real estate chart from Reuters shows a dramatic-looking drop in home sales as of the end of 2022. Yes, it looks pretty steep, but here’s the upside—buyers who are serious about purchasing will have an easier time getting the home they want at a reasonable price.
As an agent, I like to look at this situation as weeding out the lookie-loos and prequalifying my buyers for me. With a more stable market, the buyers who contact you will be more likely to complete a transaction with you. That’s a win!
16. It’s All Over but the Crying for Sellers
OK, so sellers are having a hard time coming to grips with the fact that they missed the big selling moment. They’ve had to go cry in the corner over missing out on all that extra profit they could have made if they had sold just six to 12 months sooner.
Truthfully, the insane escalation of home prices during 2021 was a once-in-a-lifetime anomaly. And now sellers are realizing they need to be more realistic about prices. There’s still plenty of opportunity for a savvy homeseller to make a profit off the sale—it’s just not going to be the inflated $100,000 over asking that happened in 2021.
As an agent, you can be instrumental in coaching your sellers, providing them with a thorough comparative analysis so they know exactly what price they should list their home for to get the best response from the market.
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17. Houses Are Sitting Longer on the Market
Houses are lasting longer on the market than they were in 2021. Which, if you’re an agent, just made you breathe a sigh of relief. The market was so difficult for buyer’s agents to work in during 2021. Homes flew off the market so fast you didn’t have a chance to get an offer in on a property before it was snatched up. Clients were crying. Offers were outrageously overinflated. Out-of-town clients didn’t even wait for a walk-through video before throwing everything they had at sellers. It was a circus.
With homes lasting longer on the market, buyers can slow down, take a breath and choose a home they love instead of just trying to snag a home that’s available. This is a much better market to work in for agents and clients.
Real estate is a fascinating industry, complete with shifts that can happen overnight, and peaks and valleys that can shake up even the most seasoned veteran agents. So when buyers and sellers can come together to complete a transaction without someone curling up in a fetal position, it’s a win.
Your Take
Looking at these real estate charts, what do you see? Do you see a return to normal in the market? Have you seen real estate charts that contradict these ones? What can you take away from these real estate charts and the trajectories they portray?
I would love to hear your ideas about the market and where it’s headed. Let me know your thoughts in the comments.
