Above, Keller Williams’ Gary Keller
At Keller Williams’ “Family Reunion” event in Las Vegas on Feb. 27, during which more than 14,000 KW folks attended, with another 2,000-plus tuning in online, Executive Chairman and Co-founder Gary Keller, in a “State of the Housing Market” keynote speech, cautioned that while there remain challenges in the real estate industry, there is also opportunity for growth.
“Right now real estate is in a recession, but the economy’s not in a recession,” he said. “So as long as (the Fed) can keep us in a recession and keep the economy out of a recession, they’re going to keep rates high.”
The lead session also featured comments from company leaders Jay Papasan, vice president of content strategy, Jason Abrams, head of industry, and Ruben Gonzalez, chief economist, with all providing thoughts on the year ahead and what their agents can do to be successful, no matter how the market turns.
RISMedia was the exclusive media sponsor of the annual event.
A look ahead
In addition to key points made on the Fed outlook, topics discussed on the panel touched upon several areas, such as affordability, inflation, GDP, unemployment, home sales and mortgage rates. Company leaders emphasized that agents pay strict attention to these market trends, which may have a long-lasting impact.
The issue of housing affordability was a key point presented by Keller to agents through a deep dive into the reality of expenses for those buying a home, along with adding historical perspective on affordability, noting it was not as low as in previous years.
Factors affecting national affordability concerns included low interest rates and those working from home leading to an increase in buyer demand—and raised prices. However, Keller explained that based on the historical trend line shown, homes are still within the range of affordability.
“So what you had going on is what I would call kind of a mobility experience for the first time. And basically you had extremely low interest rates—historically low interest rates—and all of a sudden you had the work from home movement,” he said. “I could live anywhere and I could afford almost anything. And that took us to a place we hadn’t really seen before in terms of affordability. And now of course we have the opposite effect. People are locked into low interest rates. So we have a no mobility problem now because they’re locked into these low interest rates in their minds. And all of a sudden businesses have begun to understand that coming to the office is more effective than fully a hundred percent working from home. So all of a sudden now we have just the opposite.”
Keller warned that for those expecting affordability relief this year, “I don’t think that’s going to happen,” adding that the perception of what is affordable and what is overpriced these days may be evolving.
“My birth into this industry was when affordability was 49% of your income,” he said. “People today look at 32% and go, ‘Oh my gosh, this is horrible.’ Because it used to be 17% or it used to be 18%. I think for a day or two it even got to 16% of your income. Okay, that’s awesome. But the trend line says 27%, that’s what you would expect over your lifetime. You’re only at 32%, so again, it’s more perception and it’s more where you want to put your money.”
Commission lawsuits
Regarding the blockbuster Burnett antitrust lawsuit decision earlier this year, Keller made only a brief reference to the case.
“So antitrust lawsuits, we tried to win, we did not win and then we looked up and realized that the right thing to do was to settle on behalf of everyone in this room. That’s what we did,” Keller said.
“The challenge though,” Keller added, “is that right now the voices that you hear are the voices of individuals who either believe they’re not going to get sued or will not be sued. Everyone else, please understand this is an active lawsuit. It is ongoing, and as a result, you’re not going to get any of us to talk about it. We hope that our settlement gets approved and we hope that things move on. But you’re not going to get comments out of anybody who is involved in it. That wouldn’t be appropriate.”
Keller, Florance talk shop
Following the State of the Housing Market address, Gary Keller sat down with Andy Florance, founder of CoStar Group, for a one-on-one on CoStar’s growth and future plans. Florance talked about how he comes from a real estate family and started CoStar while studying at Princeton. The company’s first product was for the commercial real estate industry and is now used by 200,000 commercial agents worldwide.
Florance noted that CoStar has since expanded to include various other platforms, such as LoopNet, Lands of America, BizBuySell, Real Estate Manager, CoStar Lender, STR, 10x, Apartments.com, and Homes.com. He aims to make Homes.com the number one residential real estate portal in the U.S., focusing on creating value for agents, sellers and buyers. He also emphasized the importance of agents responding quickly to high-quality leads generated from their site.
Keller asked Florance for some details on his family growing up.
“I came from a real estate family,” Florance began. “Mom was a real estate agent her whole life, her whole career. I learned how to use a post-hole digger at 11 to put a For Sale sign out front. I did the open house signs. My brother’s a broker, my dad’s an architect, my son’s becoming an architect and my sister is a designer. And I just found out that my niece is in the exhibit hall with a company called Canva selling real estate marketing software. So if you drop by the Canva Creative Juice booth, say hi to Fanny, tell her Uncle Andy says hi!”
Next Keller had Florance tell the Keller Williams audience how he started CoStar in college, no doubt likening it to the effort and full focus he brought to his company in the formative days.
“When we started the company, the name CoStar was very intentional,” Florance pointed out. “It was co-starring with the agent who was starring in the transaction. So we’ve always built the company around supporting and creating value for the agents, and that’s what we’ve done for four decades. And now we’re working on my real life’s passion, which is homes.com.”
Keller was glad to have Florance share his excitement over continuing to build a brand.
“I think that you’ve built clearly, maybe arguably, the most successful real estate data business in the world,” said Keller. “Congratulations on that. You’ve been very bold and a little feisty about what you want to accomplish with homes.com. Can you share some more on that?”
“We are committed to building the number one residential real estate portal in the U.S,” answered Florance. “We’re going to build that on the basis of ‘your listing, your lead.’ We build all of our products by going around the country doing focus groups and listening to agents, buyers and sellers to understand what they want. And this is what they want.
“We don’t think there’s a successful platform in the U.S. Having a lot of traffic is necessary to be successful, but it’s not sufficient. We want to build a platform that has the most traffic but also creates value for the agents, the sellers and the buyers. We heard from agents that they want to have their brand out there, they want their name out there, they want to have their firm out there. We want to put that experience front and center for the consumers, the sellers and the buyers looking for agents. We know that agents want to have their relationships with their buyers and sellers respected and protected on site. And we’re doing that.
“We’re investing well over half a billion dollars this year alone. We’ll be investing several billion in marketing the site. We will reach 90% of U.S. households. The average household will see an ad from homes.com 600 times this year. And that will drive a lot of impressions to our site. And I believe that will drive several hundred billion impressions or views for agent names, bios and logos. So this is a lot of fun.”
CEO, tech leader inspire the team
Next, in a State of the Company discussion centering on KW’s market share, growth path and technology roadmap, CEO Mark Willis and Chief Technology and Digital Officer Chris Cox extolled the company’s achievements while outlining their visions for the future. Willis was first, proudly reviewing recent honors.
The company was recognized by various outlets for its diversity, innovation and as a top franchise for women. It was also named one of America’s best employers for new graduates and women. KW celebrated its 20th anniversary and has given more than $63 million in grants. With more than 180,000 agents, it closed more than 895,000 deals in the U.S. and Canada in 2023.
Willis emphasized the need for growth, with aims to recruit a minimum of 100,000 new agents this year. He was happy to report that reaching a settlement in the Burnett case was a crucial development.
“We know this takes an enormous weight off all of our shoulders, and while the court must give final approval before it takes effect, this settlement will provide the relief, the stability and the freedom from distractions so we can run our independent businesses and reach so many achievements.
“We need to be eyes wide open about the challenges that begin by looking at our market share and what it will take to remain number one across the U.S. and Canada.”
Willis acknowledged to the large crowd of KW agents and brokers that those challenges are different in today’s residential real estate market, and must be met with exceptional skills and a tireless work ethic.
“I remember a time, and I know many of you do too, when we would routinely outperform the industry year in and year out,” he said. “Now, what makes this reality doubly challenging is the macroeconomic environment that we’re in. It’s no secret that this is the most competitive market we’ve seen in the last 30 years. The number of available transactions per agent was at an all-time low last year.
“Clients and customers are facing affordability challenges as mortgage rates remain elevated after peaking near 8%. Meanwhile, home prices, which saw rapid growth in the pandemic era, haven’t yet fully corrected. As a result, inventory levels have remained in historic lows. But our economic model, our operating model, our organizational model, they absolutely set us apart from every single competitor.
“The day you no longer believe that you have something to prove to the world; the day you believe you’re entitled to no longer push because you’re comfortable and thrive; the day you think your hard days are behind you and you begin to coast; that’s the most dangerous day. Leadership in today’s world requires energy, determination, and stamina to withstand the setbacks and push ahead of the competition. Leadership requires grit, resilience, and drive.
“Our destiny is to be the largest real estate entity on the planet and I believe that we will win by insatiable hunger to be our best, guided by absolute clarity around our priorities, driven by a commitment to live our culture. We will win!”
Cox followed by doubling down on Keller Williams’ commitment to technology, and how it has and will continue to be a game changer to keep the firm on top. He attributed the company’s success to its technology, sharing that 75% of their agents use their Command platform every month, and that the cost per lead has decreased by 47% over the last year.
Looking ahead, Cox expressed excitement about the launch of new consumer sites, a learning chatbot within Command, and the introduction of AI capabilities. He also mentioned a new AI model that can predict the likelihood of a contact buying or selling a property.
“I’ve spent my entire career working in technology, and I don’t think there’s ever been a more exciting time, a more optimistic time in terms of what we can do,” he began. “I’m exceptionally proud of the technology team and how much of a difference that team is making for our agents and our clients.”
Cox noted that KW’s technology works well for two main reasons.
“First, our technology is built by agents for agents, which means we’ve walked in your shoes, we know what you need and what you don’t because you’ve told us,” he said. “Secondly, because of that, it’s about perpetual improvement, always working to improve the experience and never, ever being done.
“We don’t release a product and just disappear. We lean in and work to make sure that it’s more intuitive with fewer clicks and more insights. It’s also important to remember that Keller Williams was built with education at the heart. Command was built on the principles to build a database, feed it every day, communicate with it in a systematic way and serve all the leads that come your way. It’s that simple.”
Cox told the audience that using the technology worked best when Keller Williams agents combined it with other educational tools.
“Obviously we want you to use Command, but perhaps more importantly want to use it in conjunction with our other best practices,” he stressed. “We have an entire curriculum of free classes taught by our Keller Williams University tech training team. Those of us on the technology team are also constantly learning and gleaning more insights every day.”
Of course a tech pro has to delve into the AI aspect, and Cox did so, showcasing how KW plans to grow its usage going forward.
“People use that term, AI, to refer to many different things, but as everybody knows at KW we like to think it really means agent intelligence,” he said. “That means that AI is only good if it’s making you more intelligent. If it’s not actually saving your time and helping you make more money, then it’s not supporting you the way you need it to, period.
“As many of you are aware, we picked up a brand new version of kw.com. It’s got a brand new, all new look and feel. It more clearly reflects how Keller Williams is driven by our most powerful property search experience to date, and it funnels potential new KW agents straight to our market centers. We began the rollout of new agent sites and team sites late last year working to continuously optimize those for things like search engine optimization.
“Next month we’ll be introducing a brand new version of the consumer mobile app. One thing that I’m really excited about is the deeper collaboration tools that we’ll be offering and that we’ll feature, like home valuation tools and affordability calculators.”
RISMedia’s Jack Walsh, Maria Patterson and Michael Catarevas contributed to this report.
