Gary Keller took to the stage at the 2023 Keller Williams Mega Agent Camp in Austin, Texas, Tuesday morning with his usual bravado: a black-and-white video featuring his favorite animal, the buffalo, in a thunderstorm, alongside a motivational message for agents. Rather than fear the storm, Keller Williams agents embody resilience and adaptability to conquer any market challenge. “We are the storm,” the text read.
Keller kicked off the first day of the two-day gathering by offering his take on the housing market and economic conditions. Despite persistent inflation challenges, a volatile mortgage market and limited inventory, Keller said it was still a good time to buy a house.
“It is always the right time to buy the right piece of real estate,” Keller, the executive chairman and founder, said. “Timing is a fool’s game.”
Instead of allowing homebuyers to be educated by “clickbaity” videos espousing an impending real estate crash, Keller told agents that they need to take charge of the narrative and be the ones out there educating consumers on their local housing market.
“Our goal is for you to always be the economist of choice in your local market,” Keller said.
Keller did acknowledge that it has been a slower year for the housing market and agents.
“Our industry is in a recession,” Keller said. “But my bet is that we are already close to the bottom of what the real estate market would do no matter what. I think we’re on Skid Row right now, so I don’t think it is going much lower.”
To illustrate his point, Keller highlighted that the industry is projected to see 4.3 million home sales this year, significantly down from the 6.12 million sales in 2021, but roughly the same as 2009 to 2012.
“If you look at the trend line, given the overall economy, there is not a whole lot of room to go, to get to the bottom,” Keller said. “Yeah, you could drop down to 3 million, but we haven’t seen that in 30 something years in what was a completely different setting than you are in now. In modern times I think that number is more around 4 million, so I don’t think we have anything shocking in the real estate space.”
Fewer overall transaction sides means the average number of sides per agent this year will come in at roughly 5.7 sides, however, the average market volume per agent is projected to come in at $1.44 million, the fifth highest year on record, he said.
Keller attributed this to the increase in median home sale price which is projected to come in at $382,000 for the year, 7% above the trend line of 4% annual increases.
“People say it is way overpriced, but it is not phenomenally overpriced,” Keller said. “The trend line goes up 4%, which is the expect annual appreciation of building a home. In 2006 we were 21% above the trend line and now we are only 7%. Think about it this way, if next year real estate holds, meaning that it doesn’t go up by 4% we are just barely above the trend line and if it drops by a percent then we would be only 2% above the trend line.”
In addition, Keller noted the wave of first-time Millennial homebuyers and move-up Millennial homebuyers who are hitting their peak earning years will be hitting the housing market in the next few years, giving agents more reasons for optimism.
Keller concluded the discussion by circling back to the opening mantra of “we are the storm.”
“If you do the work, you will have a great year in real estate, regardless of the market,” Keller said. “If you don’t do the work, and spend your time trying to avoid contact with people, you aren’t going to like this industry very much.”