Keller Williams Predicts Uncertain Housing Market with Prolonged Slowdown

Gary Keller recently shared his insights on the housing market at the Keller Williams Family Reunion event in Las Vegas. Despite low home sales projected for the year, Keller highlighted reasons for optimism, including the industry’s record $2.2 trillion sales volume in 2024. While current transaction volumes are at their lowest in nearly 30 years, Keller predicts that it may take a few more years to recover from the slump, with at least two more years of similar conditions anticipated.

The real estate market continues to face challenges, with home prices currently sitting 9.9% above the long-term trend line. However, experts believe this situation is not as alarming as it may seem. The increasing percentage of homes with price reductions, from 24% in January 2024 to 31% in January 2025, indicates more space for negotiation for buyers as the market adapts.

First-time homebuyers are encountering obstacles entering the market, with the average age of first-time buyers rising to 38, up from 29 in 1982. Real estate agents remain pivotal in transactions, with 88% of buyers utilizing an agent to purchase their home. Interestingly, 75% of buyers opt to work with the first agent they contact, marking an all-time high.

Moving forward, Keller emphasized that the real estate industry’s dynamic is less prone to major shifts compared to other sectors. Despite gradual improvements in housing inventory, new construction rates still fall short of historical averages. Builders are grappling with regulatory constraints, soaring land costs, fluctuating material prices, labor shortages, and profitability challenges.

While the market may take time to normalize, KW experts believe that fundamentals remain sturdy. Keller underlined the importance of every generation having an economic event that resets asset prices, providing an opportunity to enter the market at a lower cost and navigate future trends.

Public sentiment surrounding real estate investment remains positive, with 80% of consumers viewing real estate as a sound financial investment. Looking ahead to 2025, tight inventory and moderating prices are expected to persist, with transaction volumes below historical averages as the market addresses affordability challenges. Nonetheless, long-term trends in price appreciation and strong buyer interest indicate potential opportunities for patient and strategic consumers and real estate professionals.

Throughout his address, Keller touched on various topics, including federal government changes, tariffs, and recent developments in the industry. He also addressed a rival CEO who had referenced Keller’s prior comments, asserting the need for original thought and discourse within the real estate space. Keller’s outlook for the future of the housing market remains cautiously optimistic, suggesting that while the climb may be slow, it is indeed progressing towards a more stable future.