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How “Bad” is it?: An Overview of National Real Estate Market Data

Last weekend’s annual Keller Williams conference in Anaheim California shed some light on the volatile national real estate market. In his State of the Housing Market address on Sunday, Gary Keller, the founder of Keller Williams Real Estate, provided a comprehensive update comparing historical trends in the real estate market and even made some predictions for 2023.

For many, 2022 felt like one of the worst years on record for real estate, yet historical data shows the market is nowhere near the lows of previous market cycles. In fact from a market value standpoint, 2022 was still one of the highest on record in sales volume. Why? Home appreciation has skyrocketed, but there is more to the story.

In the United States, the total number of home transactions dropped a significant amount, from 6.1M in 2021 to 5M in 2022. We haven’t seen a level this low since 2014.

However, rising home appreciation is greatly impacting the national real estate economy. Nationally, the long-term trend in home appreciation is 4% annually. Yet home prices increased significantly, 12% above the 4% trend line in 2022.

This drove the total market volume to a near-record high of 2.53 trillion. And surprisingly, the total volume of the real estate market in 2023, is projected to reach $2.13 trillion even though appreciation is expected to decline by 1.0 percent.

But there are challenges ahead. In the last 12 months, mortgage rates have risen sharply as the Federal Reserve tries to control inflation and avoid a dramatic recession. This is putting a significant damper on home sales when last year’s interest rates could be found below 3% and now buyers are faced with a 6% rate. But 3% is not the norm. In fact, the historical average interest rate from 1972 through 2022 is 7.81%. The historical average interest rate from 1990 through 2022 is 5.97%.

Another challenge is affordability and inflation. Last year, affordability spiked to well above the long-term average putting homeownership out of reach for many. Used as a gauge of the economy’s health, in 2022 the Gross Domestic Product was down significantly from 2021 indicating that the attempt to cool the economy with higher rates is working, yet unemployment remains historically low.

For a deeper dive into this data, feel free to contact a KWJH agent to discuss this report, along with the local market trends as we head into 2023.

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What’s Trending in 2023?

Year over year, trends in fashion and interior design carry us into 365 days of new memories and style. Looking toward 2023, we have seen shifts in colorways and design that will make this year one to remember.

Pops of Color

Last year, saw a rise in moody interiors, earthly tones and dark wall colors but, while this trend continues into the new year, bright pops of color are to be expected.

Pantone’s color of the year is Viva Magenta, a bright pinky hue. Among neutrals and dark tones, this burst of color will add energy to the space and make quite a statement. Because of this impact, we suggest using bold colors in open living spaces rather than the bedroom or small rooms.

If you’re looking to integrate color into your home, start with accents, pillows, and throws to play with the style and, as we approach spring, welcome more color and lean into this burgeoning trend.

Ombre Velvet Lumbar Pillow from Twenty Two Home

Lazul Onyx Jewelry Box from Elevated Living

Mid-century Motif

Mid-century modern furniture and decor have captured the attention of stylists everywhere. Continuing into 2023, classic mid-century design with rounded lines, dark natural woods, and vibrant colors have gone mainstream.

Replicate this look by finding a bold furniture piece to style around or introducing geometric accents or lighting to a space. A total renovation is not necessary with pieces like these local finds:

Rust Upholstered Chair from Nest at Home JH

Curated Collections

Create a space that is curated not cookie-cutter. Waste-reducing practices like antiquing and repurposing have led to a trend of mixing furniture and styles. Rather than surrounding a table with six identical chairs, a wooden bench can now find itself across the table from a velvet dining chair and the styling opportunities are nearly endless.

With this trend, it is a good idea to consult a designer or stylist who will help you balance found and new items to look elevated and intentional rather than hodge-podge. Keep in mind that local antique stores are a great source of material and inspiration to accompany new purchases.

Check out Home Again JH, Fighting Bear, or Eclectic Consignment for fun local finds.

When it becomes hard to keep up with the trends, you can’t go wrong with timeless staples like leather, solid wood and neutral tones. Leather goods will wear with time and age beautifully over the years, solid wooden furniture is hard to find but resilient to damage and grounding with it’s dark tones and wood grain and neutral tones can be evolved with the addition of colors and accents. As trends come and go, evolve your space and welcome creativity through style – a new year and a new look.

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