Gary Keller didn’t care about Compass. Or anywhere. Or Redfin. Or a rocket mortgage. However, he does care about Homes.com and Andy Florance, whom he “really likes” and considers “damn competition.”
“The Compass-Anywhere merger was all over the news. It’s getting a little bit of scrutiny now because it was apparently the fastest approved merger of giant companies in history, and they’ve now followed that to some backroom dealings that greased the wheels…” said Keller, who caused a stir from an audience of more than 10,000 agents at KW’s annual Family Reunion conference on Monday. “Do we care? I don’t. I mean, I wouldn’t have done it.”
Commenting on other hot topics in the industry, Keller indicated he is keeping an eye on who wins in the conflict between Homes.com parent CoStar and that company’s investors — although Keller said he does like CoStar CEO Andy Florance.
Regarding Rocket, Keller said the mortgage giant’s acquisition of Redfin is all about “trying to connect leads to mortgages” rather than increasing Redfin’s sales volume.
Keller has also spoken out about private listings, saying the battle “is interesting,” though he believes “the consumer is always right. The buyer is always right; the seller is always right.’
Otherwise, the only thing on the Keller Williams founder’s mind is the current housing market — and how exactly he’ll guide the franchisor’s 157,000 affiliated agents through it.
Gary Keller | Credit: KWRI
“Historically, yes [sides per agent] The number would be around nine to ten [sides] and throughout history it just fluctuated around that,” he shared. “We were doing pretty well up until COVID, and we weren’t doing too bad when you added in the increased sales volume, right?”
“However, in the last few years we have reached new territory and low points per agent,” he added. “You have more agents chasing far fewer transactions.”
The increase in resale inventory – which is expected to rise 2 percent this year – is still not enough to quell an ongoing inventory shortage, meaning agents are staring into the face of another year where every sale will be hard-fought. Pricing, Keller and his panelists Jay Papasan, Jason Abrams and Ruben Gonzalez said, will often be the deciding factor in whether a listing thrives or goes bust.
“We’re missing the approximately four and a half million new homes that were never built, and because of this structural change, where interest rates are low, people don’t want to part with that, and as a result they’re kind of stuck in inventory,” Keller says. “If you’re in the kind of market we’re in, we’re going to see price drops, which is not necessarily an indication of bad prices. It’s also just an indication of the competitiveness of getting the property sold.”
The inventory shortage could ease in coming years as federal lawmakers place a higher priority on improving housing affordability by removing regulatory barriers, reforming zoning laws and expanding financing options for homebuyers and homebuilders. KW Chief Industry and Education Officer Jason Abrams highlighted the Housing for the 21st Century Act and the ROAD to Housing Act, two bills with strong bipartisan support in the House of Representatives and the Senate.
“They’re doing four things: they’re expanding access to mortgages under $150,000, they’re streamlining manufactured and modular housing to make that more acceptable, [and] they scrapped the environmental assessments,” he said. “And they’re talking about even putting pressure on these cities by withholding funding if they don’t target more parcels.”
But even if these bills become law, it could take years for the benefits to reach home buyers, home sellers and other housing market stakeholders, Keller said. And these solutions may come a little too late for millennials and Gen Zers, who struggle with high student debt and rely on inheritances to buy their own home.
“I’m a Boomer, by the way,” Keller said. “Boomers currently own $85 trillion in assets, nearly 50 percent of all assets in the United States. That makes sense, though, from an age perspective. Nineteen trillion of that is in real estate, and 73 percent of those over 55 when surveyed said they want to give some or all of their assets to their children before they die. And on average, they want to give away 30 percent while they’re still alive.”
While it may be tempting for younger generations to sit on the sidelines and wait for market headwinds to pass, Keller says historical data proves this is a good time to buy given the appreciation of home values.
“Look at the jump from ’19 to ’20 and ’20 to ’22, that’s huge, right? Then we get to ’23, and you say, ‘Wow, we made a total jump of $100,000 in such a short period of time.’ And that leaves everyone with a poor idea of what’s really happening with pricing,” he explains. “They think, well, we’re way too expensive, but people are only 7.4 percent above the 4 percent trend line, just 7.4 percent – that’s it. And other than the Great Recession, you’re going to find that prices really aren’t going down. So the expectation that prices are going to go down usually doesn’t really work.”
Overall, millennials and Gen Zers are better off than their parents at age 30, with just over $200,000 in assets — about $53,000 more than their parents had. However, KW chief economist Ruben Gonzalez said the problem is a widening wealth gap, which is making it increasingly difficult for lower-income people to build wealth.
“It’s been a consistent theme where people like to harass the younger generations over the years, ‘Oh, they don’t do it, they don’t do it, they don’t do it,’” he said. “But this shows that it’s a bit of a wash. Most people do pretty much the same thing. But what’s different is… the haves and have-nots within each of these generations, with the differences increasing with each generation.”
Keller and Abrams asked agents to shun the doom and gloom of the current moment — home sales, they said, are unlikely to be any better than they will be in 2025 — and think about the market in historical cycles, which show that home values tend to rise, creating a solid source of wealth for homeowners.
“Feelings – don’t look at them,” Keller said. “Work with facts.”
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