Buoyed by strong economic growth, rising property values and low interest rates, Texas-based Keller Williams Realty announced year-over-year gains in hiring, transactions, sales volume and profits, according to a third-quarter earnings report obtained exclusively by Inman News.
Sales volume climbed to $91.9 billion in the third quarter, up by $1.5 billion compared to the previous quarter, according to metrics provided by the company. Transactions, franchisee owner profit and profit share all declined modestly compared to second-quarter earnings but rose significantly year-over-year, according to the latest quarterly report issued on Wednesday.
“Having rates as affordable as they are, unemployment as low as it is, people are able to now start cashing in on the last several years of economic growth that has sort of rolled up into creating this strong demand we’re seeing currently,” said Ruben Gonzalez, a staff economist at Keller Williams. “We’re seeing really low inventory levels on an aggregate level and a lot of that is a reflection of the demand—and not just a shortage in construction.”
Globally, the privately held realty company added 6,011 new agents to its roster in the third quarter, lifting its total number of associates to 173,015, according to the report. The 34-year-old company, which recruited 6,175 agents during the prior quarter, has long claimed to be the world’s largest real estate franchise by agent count.
Keller Williams agents, meanwhile, closed 300,517 transactions, a 7.6-percent increase from the same period last year. Year to date, 813,828 units have changed hands, up 10 percent over the same period in 2016, officials said.
Across the United States and Canada, the number of closed units per agent for the third quarter hovered at 1.94 transactions, on average, said Darryl Frost, a Keller Williams spokesperson, who forecasted that the number of closed units per agent would average between seven and eight transactions by the end of 2017. “That’s amazing considering we netted 5,279 agents in the United States and Canada alone in the past three months,” added Frost.
Sales volume rose to $91.9 billion, a year-over-year increase of 16.3 percent. Subsequently, franchisee owner profit increased by $56.6 million, a 10.1-percent rise from the same period last year. Year over year, profit share increased by 11.3 percent, to $49.5 million, according to the earnings report.
“As top agents know, when they increase their closings, they see a disproportionate increase in profit,” said Keller Williams CEO John Davis in an email to Inman News. “Our market centers work the same way. It’s a model. For every 10-percent increase in net agent count, they experience a 20 percent increase in profits. And because we’re a profit-sharing company, that means more money to help people fund their lives and create opportunities.”
“Activities drive growth and growth fuels abundance,” added Davis.
The earnings report comes on the heels of an expansion into the Philippines and Bermuda, where the 15-year-old realty services company Moura & Associates will be rebranded as a Keller Williams franchise. The outpost will house nine professionals serving under founder Albert Moura and will complement more than 5,000 agents employed across 26 countries, including Dubai, Indonesia and Israel, according to officials with Keller Williams.
“In business development conversations, our focus remains solely on choosing the right people to lead Keller Williams’ franchises worldwide,” William Soteroff, president of Keller Williams Worldwide, said in a prepared statement. “On average, we spend more than eight months in extensive training before officially launching a franchise. It is a complex process for a reason as each new leader becomes the standard-bearer in their country.”
Email Jotham Sederstrom