Gary Keller warns of unpredictability in the housing market

According to the KW leaders, they expect that unpredictability will lead to some people going back to large investments, such as buying a house, unless their living conditions determine that they have to make a move.

“We know people are moving because they are getting married, they divorce, they have babies,” Papasan said. “I think there are the timeless things that motivate people, even if the market is not favorable, and that is where we have to concentrate. Those sales will still happen. ”

Despite the uncertainty, KW predicts that 4.2 million sales of existing home will take place in 2025, an increase in the approximately 4.1 million turnover in both 2023 and 2024.

“What is fascinating about this is that it is not gradually getting better at the moment, and what is interesting is that people continue to expect it to get better,” said Keller, co-founder and executive chairman of the broker. “But here is the thing: if you go back and look at history, you will understand that when you enter such a trough, it usually takes three to four years to get out.”

Keller believes that both 2025 and 2026 will be slow for the sale of living, but he expects that things will eventually pick up the following years. Papasan also noted that although market conditions can be a challenge, things don’t get worse.

“I don’t want to Jinxen on the other side either, but it didn’t get worse in more than 25 years,” Papasan said. “When I look at 2008, when it was just terrible, it was still around the level it is today.”

Keller added: “There is a bottom on the market and it is not zero.”

But while Keller Williams predicts that the median house price will increase in 2025 – and that mortgage interest rate will remain nearly 6.5%, so that the affordability of homes is further limited – managers have told agents that it is still a good time for consumers to buy and to sell real estate.

“You may buy at the top of the moment, but you never buy at the top of the market because it always goes up,” said Abrams, KW’s head of industry and learning.

“Don’t wait to buy real estate – buy real estate and give it time,” Papasan added.

With this in mind, Keller said that many in the industry in 2025 expect an appreciation of the home price of 2.5%, but he warned that nothing is certain.

“We could certainly see appreciation if nothing happened, but the interest rates are falling, but they are not motivated to drop the rates now,” said Keller.

Part of the issue that KW leaders see with interest rates are linked to inflation, which rose higher in January. But it is also due to a lack of home inventory and the fact that the rates continue to float around the historic average of around 7%.

“When we started Keller Williams in 1983, look at where the rates were in the teenage years, and we flourished,” Keller noted.

He and other KW leaders believe that consumers adapt to higher rates. Based on historical trends, they expect that more potential buyers will lean on the market when the rates start to fall, although the rates are still well above the post-Pandemic levels of 2020 and 2021.

Abrams also emphasized the importance for agents to offer customers a historical perspective on mortgage interest. They must consider discussing possible solutions for mortgage challenges, such as buydowns from the rate or the possibility of refinancing in the future.

But while Keller and the KW team expect that the market will continue to puff more or less as it has been, they also see the potential for some major disruptions in the near future.

“It would cost a Black Swan event before house prices fall,” said Abrams. “If we ask what is needed to send the prices lower, it appears that it is something crazy.”

But that “something crazy” may be on the horizon.

According to Keller, if Elon Musk’s “Department of Government Efficiency” reaches its goal, that would add another 2.2 million unemployed claims and stimulate up to 5.7%to 5.7%.

Although Keller acknowledged that this usually leads to an increase in housing stock, since the unemployed want to sell to sell houses that they can no longer afford or are forced to move for new work options, he noticed that 5.7% very almost 6% is unemployed, that is an indicator of ‘disastrous economic times’.

The KW team also delved into other risks that the US economy is confronted in 2025. This includes things such as unpredictable policy and natural disasters.

“You think of immigration,” said Keller. “In Texas alone, 25% of the construction sector is employees without papers. If they would leave tomorrow, all bets were eliminated because there is no replacement for them at the prices they want to work. I am apolitical about this, but we must be aware that we will move a very economically risky period in America. “

It remains uncertain about how things will shake this year, but Keller acknowledges that things can go very well. He also sees the confluence of various policy measures, such as rates, massive deportations and cuts on the government as the potential catalysts for an economic event that causes house prices to fall.

“This could be the economic event that the real estate sector was waiting to create high unemployment, to create surplus supply and to fall back the prices,” said Keller.

In the meantime, however, Keller said that it is important for agents to concentrate on generating leads – especially the lead generation of sellers – because the number of new entries increased in January, indicating that more homeowners may be interested in mention this year.

“Making the choice not to sell houses is stupid,” said Abrams. “The reality is that you do not compete with 1.5 million brokers, but much less. At the end of the day the volume is there. ‘