Gary Keller’s Real Estate Market Update

Gary Keller and Jay Papasan kicked off Mega Agent Camp (large Keller Williams training event) with an update on the US housing markets. Keller reminded the audience that agents are the local economist for their clients. It is imperative that when talking to buyers and sellers they make sure to have the most current information available to help clients understand the national picture and make the most informed decision possible. Here is a recap of Keller and Papasan’s presentation. (Posted on August 20, 2015Keller Williams Realty International)


Housing Market Cycles

Gary Keller Market Update - Market Cycles




The housing market is broken into four cycles; Downturn, Bottom, Recovery and Top.

Downturn – Characterized by falling sales and prices, rising inventory and new construction levels off.

Bottom – Characterized by sales, prices and inventory leveling off. New construction falls.

Recovery– Characterized by rising sales and prices, falling inventory and new construction leveling off.

Top – Characterized by level sales, prices and inventory with rising new construction.

Housing has always moved in cycles and we have had downturns before the financial crisis. For younger agents who have not experienced other cycles, they may think that every downturn looks like the last one; it’s not the case.

Home Sales



Home Sales have been strong this summer after a slow start to the year.

Home Price



A surge in home sales driven by low rates led to tighter inventory and price gains once again. The median home price for 2014 was $208,500. In June 2015, the median monthly home price was $236,400. We appear to be nearing the end of the bounce-back effect on home prices and are moving back to a long-term growth path. When interest rates rise, as they are expected to, we will likely see a slight slowdown in price growth.

NAR’s Housing Affordability Index measures whether a typical family can qualify for a mortgage on a typical home across the nation. The higher the index, the more affordable homes are. Affordability has been declining since January as prices continue to outpace wage growth. However, it remains historically high.

Mortgage Rates

mortgage rates


Mortgage rates have been slowly rising since the beginning of the year as the Federal Reserve is still debating when to adjust. Expect to see continued upward pressure on rates in the medium term; however, there is currently a great deal of volatility in global markets putting downward pressure on rates. The largest contributing factor to the movement of rates in the near future will most likely be the timing of the Federal Reserve’s decision to make their first rate increase.

New Home Construction



Based on current inventory levels, we still need to see more construction. July saw 782,000 new homes built. With affordability issues driving rents up, we continue to see significant multifamily construction.

New Loan Disclosure Forms Take Effect October 2, 2015

The implementation of the simpler, more integrated loan disclosure forms may increase mandatory consumer review period from one to three days before closing, causing delays.  In anticipation of delays as lenders and settlement agents adapt to new rules, NAR recommends:

Adding 15 days to normal closing times

Completing your walk-through as soon as possible to avoid last-min changes that may require lender approval.

About the Author

Katy Korby is the CFO of the Korby Home Team. Her passion is ensuring that our clients have an out-of-this-world experience selling their homes with the Korby Home Team. Katy comes to us with a diverse background and a unique skill set that enhances the client experience. Her attention to detail and care for people make her a wonderful asset to the team. Graduating with a degree in Theater, Katy has performed in numerous plays and most recently starred in a locally produced indie film that is being entered info film festivals around the nation. Katy’s experience in the work world include many positions within the accounting world including tax preparation, bookkeeping, and full-charge accounting. Most recently before joining the Korby Home Team, Katy was the Market Center Administrator for Keller Williams Integrity Realty in Roseville, where she was the full-charge accountant and handled budgeting and forecasting for the company as well as day to day operations and administration of an 80 person real estate office. Katy and her husband have two children, Libby and Calvin, and have lived in Como Park for almost two decades. In 2013, Katy completed the Tough Mudder 10 mile event and is a proud member of the “Finishers” group! For fun, Katy loves reading, photography and gardening and spending time with her family.