Vision 2020: Building the Industry of Tomorrow
When comparing market stats over the last several years, at first glance, not much has changed: home sales remain steady, appreciation remains around 4%, mortgage rates continue to be at an all-time low, and affordability keeps the dream of homeownership alive for the majority of Americans. Canada’s market conditions are no different. And, while this is all good news for agents, Keller Williams co-founder and CEO Gary Keller reminded the over 15,000 attendees packed into the main hall of the Kay Bailey Hutchison Convention Center Dallas that next year could be different.
“With our current economic climate and 2020 being a presidential election year, there’s no energy to try to change interest rates and unsettle markets. But, after next year, all bets are off.”
– Gary Keller
Joined on stage by KW president Josh Team, vice president of learning Jay Papasan, and chief economist Ruben Gonzalez, Keller and crew used facts and figures to encourage agents to take this window of tranquility (and prosperity) as an opportunity to protect their business – and the industry – from future disruptions.
Maximizing the Opportunity of Now
One of the few concerning metrics the panelists addressed is the sluggish growth of new-home construction. This is especially true for homes priced under $300,000. Contributing to this shortage is the rising cost of land and building materials alongside institutional investors who buy up properties, turning them into rentals before potential home buyers can even put down an offer. These factors make it difficult for first-time buyers (some saddled with student loan debt) to enter the market, leaving agents competing over a pool of established home owners and sellers.
“We may have just had a top ten year of real estate sales, but it’s never been more competitive in terms of the number of agents competing for business.”
– Jay Papasan
The good news is, there’s an entirely new generation of first-time buyers preparing to enter the market and the desire for homeownership remains as strong as ever. Another promising statistic is the increase of single-female homeowners on the market, currently the second largest segment of first-time home buyers (second only to newlyweds). As the economic power of female professionals continues to grow, so will the opportunities for agents.
Keeping Agents at the Heart of Real Estate
Another external force real estate franchises and agents will have to keep an eye on is outside interference from venture capitalists. “Technology ultimately disrupts every industry that it touches,” Keller explained, recalling the undeniable truth that spawned KW’s transformation from a real estate company to a tech one.
He continued by segmenting the tech landscape into three kinds of companies: Innovators, Wait and See, and Stuck. According to Keller, Innovators have the capital and the means to innovate. Wait-and-See companies have the means, but hold off until the Innovators succeed. And Stuck companies lack both the means and foresight to anticipate change. When an industry lacks incumbent innovators, startups and venture capitalists step in. This is why, rather than trying to remain the lone innovator in the real estate industry, Keller encourages other companies to join in.
“We’re going to innovate on behalf of our businesses and consumers. As long as we do that, there’s no oxygen for outsiders.”
– Gary Keller
Strengthening the Client/Agent Relationship
While keeping VCs and disruptors out of the industry is important, the real driving force behind innovation is to create stronger relationships between agents and their clients. As the 2019 NAR Profile of Home Buyers and Sellers showed, the internet continues to be the #1 source of information for consumers. The problem is, all of the conflicting information on the internet causes unnecessary confusion. Fortunately, this presents a huge opportunity for agents. “Complexity drives people to go get advice,” said Keller, and the research supports his claim. According to the study, 89% of home buyers used an agent or broker to navigate their purchase in 2019, up 2% from 2018.
The key to keeping agents the fiduciary in the middle of the transaction is removing aggregators and other third-party tools from the process. “We want customers to say they found a home on your site. We want them to say they found it on your mobile app,” Keller said, explaining how Command and the new KW App brings agents into their clients’ online search process. But that’s just the beginning. All of the collaborative features in the KW App were designed to keep agents connected to their clients from the day they buy their first home to the moment they’re ready to sell it – and beyond.
“There’s only a small amount of people who will do business today, but there’s a huge amount of people who will be doing business tomorrow and beyond.”
– Gary Keller
Vision 2020 concluded with inspiration from the late Kobe Bryant. While Kobe was born with a special talent, it’s his work ethic that made him a legend. And, as Keller summarized, “There are moments in your life where you have to put the work in if you want to get ahead.” Now is that moment for real estate agents.
Keller Williams agents, download the presentation slides: