Google Real Estate Market Forecast
Is it possible to forecast home sales in the US housing market with a search on Google?
I had this thought as I was reexamining our search engine optimization (SEO) efforts that Joe Manausa Real Estate employs to help us do a great job selling the homes we've been hired to market and sell. We analyze and track the most common keywords that homebuyers type into a google search bar when searching for properties and homes for sale, but could we use this data to forecast the demand for homes in 2023?
Surprisingly, the current search behaviors of homebuyers online do provide insight into how strong we should expect the housing market to emerge in 2023, and today's post provides the housing market insight you cannot find elsewhere.
Homes For Sale In Tallahassee
For readers who found this article seeking "homes for sale in Tallahassee," I've included a dynamic list below of all MLS listings in Tallahassee. This list is updated every fifteen minutes, making it the most accurate property listing source for the Tallahassee real estate market. For those not interested in Tallahassee real estate listings, skip ahead to the report.
Keywords Used By Homebuyers
Let's start the discussion by explaining, "what is a real estate keyword?" Or even simpler, "what is a keyword?"
A keyword is a word or phrase that describes the nature or topic of the content on a website or in a specific article. When you hear the term "keyword," you might be tempted to think of a specific, singular word, but that is rarely the case. Keywords are typically phrases, containing more than one word. So each of the following is a keyword for the Tallahassee real estate blog:
- real estate
- Tallahassee real estate
- Tallahassee real estate blog
- Articles about real estate
- housing market conditions
Of course, there are many more, but they all relate to the central theme of "Tallahassee real estate." Keywords are an important study because they are the words that consumers type into Google to find what they are seeking, so every industry has certain golden keywords that many consumers use on Google.
It takes a lot of time and money to continually "rank" highest for the keywords buyers will use to find homes for sale, but it's as important today as open houses were back in the 1980s. Generally speaking, the majority of buyers for your home are searching online, not by driving neighborhoods, so your real estate listing agent needs to master search engine optimization for you to get the best service available when selling your home.
This is important to understand if you are a home seller and you're looking for the best local agent to market your home. You'll want to know the top few agents who have used SEO optimization to ensure their websites will draw the most buyers to the homes they have been hired to sell.
Today, we're conducting our Google keyword research to see if we can discover trends that will guide us in our 2023 housing market forecast.
I spent a few hours using a handful of great tools for examining keyword popularity so that I could evaluate keyword trends. Fortunately, Google offers "Google Trends," a tool that allows you to submit keywords to discover how they have risen and fallen in popularity over time. Here are the keywords used in today's report:
- real estate
- real estate market
- housing market
- real estate agent
- real estate brokerage
- homes for sale
- houses for sale
Google Trends - 8 Popular Homebuyer Keywords
The following graph measures the one-year average of the popularity of these eight real estate keywords. It's important to note that these are US keywords, so we have not narrowed the scope to a local market like you would want if searching for a listing agent to help you sell your home.
The first observation you might discover is that two of the eight keywords have been highlighted in the graph with solid, large lines for both "homes for sale" and "houses for sale." Of all the eight keywords shown in the graph, these two are the heaviest used by buyers that want to see the current listings of homes available.
Each keyword peaked in 2021, and both have been falling since, just about six months before the housing market responded in kind. Most interesting though is that both terms have been utilized more frequently than they were right before the pandemic hit. Does this mean that demand remains very close to pre-pandemic levels?
I believe it does, though I'll be curious to see what these trend lines look like in another six months and again in a year. Homebuyers using keywords like "homes for sale" and "houses for sale" are typically six to nine months away from making a decision.
Homebuyers who have been doing their due diligence and are much closer to making a purchase decision no longer search these two terms as they have become comfortable with their favorite local property search tool. They are receiving listings via saved searches and no longer need to discover where to find the most up-to-date list of homes for sale.
A final observation from the graph is that all but one keyword is performing much stronger than pre-pandemic levels, so there is plenty of evidence of strong demand for homes in 2023. But does this mean we should forecast a strong year for US home sales?
Supply And Demand In The Housing Market
A study of the popular keywords used by homebuyers does provide great insight into the demand side of the US housing market, but it takes more than "want" to get home sales back on track. There also needs to be homes available.
No study of homebuyer keyword usage will guide us on the supply side of the housing market. The US is short about 5.5M homes, and home builders have been under-producing since the housing bubble burst fifteen years ago. Don't get me wrong, builders want to build and sell more homes, but soaring costs and higher mortgage interest rates have left builders in a conservative position.
An accurate 2023 housing market forecast depends upon builder production and mortgage interest rates. As I write this article on January 15th, the Mortgage News Daily website reports that today's mortgage interest rates have come down more than 1% but are still 67% higher than the one-year ago rate.
It's not that mortgage interest rates are high; today's rate is about 20% lower than the 50-year average rate. Today's rates are relatively high, meaning the buyers in the market have been neutered with a far higher cost of money than what was available when they first started shopping for homes for sale. Today's rates are fine if they will stabilize (not move much higher).
But what is not fine is the higher cost of homes. Both new and existing homes have appreciated at unhealthy levels for the past few years, which all relates to the lack of builder production. We need more homes. We need to fill the void and commit to building the correct number of homes our growing population needs yearly to avoid skyrocketing home prices.