When Gary Keller takes the stage, realtors listen intently. As the co-founder, Chairman and CEO of Keller Williams, Keller is known well in the industry for his revolutionary ideas that are often game changers in real estate.
In February, I had the pleasure of traveling to New Orleans and attending Family Reunion, a conference that gathers thousands of Keller Williams realtors from the U.S. and Canada for four days of training. Each year at this conference, Gary Keller addresses thousands of realtors and dives deeply into the current status of the market.
I’ve summed up three points of Keller’s speech that I think will be of interest to current or potential home buyers and sellers as we move forward in 2019.
“We are in a seller’s market, and we are going to stay in a seller’s market,” Keller stated. This distinction that we are in a seller’s market versus a buyer’s market is partially due to a lack of inventory. When the number of homes on the market is low, the market does not favor the buyer. Another issue preventing a buyer’s market is the continual, steady increase of mortgage rates. Combined, these factors have caused the average price of a home to increase, and fewer people can afford to buy.
New home construction is currently on the rise. Tract builders, known also as production builders, are becoming a popular choice for buyers and leading to the increase of new construction. Buyers who purchase from a tract builder often buy the land and the construction of the home at the same time. Another reason for the rise of new construction is that more investors are building homes to be used as rental properties because millennials are living in rental properties for longer periods of time before purchasing a home. “First time buyers are competing with investors and getting shut out,” said Josh Team, President of Keller Williams.
Despite the fact that homeownership is lower, people’s preferences for the type of home they want are staying the same. Consumers want single-family style homes whether they buy or rent.
The shift to renting is partially due to the overwhelming amount of student debt in America. “It takes 17% of your income to live in a home,” Keller stated. The average student loan payment is more than $300 per month which is a major hurdle when saving for a home. In the current market, the majority of people buying homes are not first-time homebuyers because many people cannot take on the cost. “What I hope is that we as an industry will do our job and help people understand that the number one reason they want to buy a property is, at the very least, so that they can stabilize the cost later in their life,” Keller said.
Gary Keller’s 2019 vision speech covered much more than these three takeaways, but I saved you from a long post full of industry jargon. If you are a potential or current buyer or seller, I hope these three takeaways will give you insight into the lay of the real estate landscape in 2019. The market is always evolving. If you are looking for a realtor to work with you each step of the way, please reach out to us through our contact page.