Keller Williams President and CEO John Davis struck a triumphant tone this morning — complete with pyrotechnics — as he touted the real estate franchisor’s achievements and hinted at a change in the company culture when it comes to data sharing.
To prosper in a changing industry, data sharing among the company’s 173,000 agents “will be the focal point going forward,” Davis told attendees at Keller Williams’ Family Reunion event in Anaheim, California.
“We are not going to play from somebody else’s playbook. We may have to expand the definition of culture. Specifically how and when we share with each other,” he said.
KW co-founder Gary Keller indicated yesterday that the company would be shifting away from off-the-shelf technology in which the data agents enter can be mined by third parties in favor of in-house technology the company can use to aggregate the data for the benefit of its agents.
In that vein, KW is working on its own CRM system (first teased last year), called KWCommand, that will launch sometime in the next 12 months, KW Chief Innovation Officer Josh Team told Inman in an interview. Currently, KW’s agents use a variety of other companies’ CRMs. Its lead management and transaction tool eEdge remains, and the company is not disclosing plans for it at this time.
Today, Davis offered an example of what could happen if agents pooled their data together: What if KW agents had access to all the inspection reports in their market and could compare every three-bedroom, two-bathroom home built in 1987 in the same neighborhood? That would go a long way toward differentiating KW agents as local experts, Davis indicated.
“We are 170,000 strong and, ladies and gentlemen, that is our power, that is our leverage. We can create new and competitive insights for our people and for our clients. Let’s do this for the next generation,” he said. “We have always been ‘My Listings My Leads,’ right? Nothing has changed. We have always been ‘My Database My Business,’ right? Ladies and gentlemen, nothing has changed.”
Asked what KW is doing to make Davis’s inspection report example a reality, KW spokesperson Darryl Frost said, “KW isn’t disclosing any further details at this time.”
‘We’ve won the game of traditional broker’
On stage, Davis emphasized the company’s recent accomplishments, noting that the company had doubled in size since 2010 but had more than doubled its production numbers.
“You are now America’s undisputed heavyweight champion in agent count, in volume, in units. Congratulations!” he declared, prompting cheers and applause from attendees as fireworks erupted on stage and confetti cannons went off.
Davis also highlighted the company’s growth in gross commission income (GCI), owner profit, profit share, and royalties.
“In 2010, 47 percent of our market centers were profitable. In 2017, 97 percent of our market centers were profitable the entire year,” Davis said.
But in an interview with Inman, Davis made clear KW is not resting on its laurels.
“We’ve won the game of traditional broker. It’s been a really, really fun 35 years,” he said. But the focus on agent count, sales volume, and units “[is] not the game that we’re playing anymore.”
“Companies will be made in the next 18 months. There’ll be companies that we’ve heard of absolutely solidify their position. And then there’ll be companies that we haven’t heard of in the next 18 months that have been really, really smart and have studied the chessboard and … make good plays,” he added.
“We want to make sure that we’re one of those companies that have studied the chessboard and are making great plays in the next 18 months.”
Heavily-funded new entrants in the real estate space, such as Compass, boast their own emphasis on technology and on being “agent-centric.” What makes KW different?
For now, at least, its size, according to Davis.
“With Compass, you look at their size and the amount of data they can generate right now and you look at Keller Williams and you look at just the sheer size and how much data can be generated and what we can do with that. Whoo! That’s exciting,” he said.
Examples of data insights that may be gleaned from aggregated agent data include where buyers are coming from, where sellers are moving to, and what’s changing in communities, according to Davis.
“How can we leverage the data that comes from an appraisal? How can we leverage the data that comes from an inspection? This is what differentiates ourselves from other companies: How do we take those insights that are of benefit to and for our people?”
KW isn’t the only big player talking about harnessing the power of data. At Inman Connect New York, newly minted Realogy CEO Ryan Schneider discussed the company’s plans to take advantage of its vast data reserves to challenge the tech-savvy competition.
A look at housing in 2018
KW will likely release a comprehensive look at what it expects from housing and the economy this year in March. But in the meantime, KW Economist Ruben Gonzalez told Inman that KW anticipates 2018 will be another strong year in housing, though perhaps a bit slower due to inventory shortages and rising mortgage rates.
The stock market correction earlier this month had “some negative effect” on housing demand, but Gonzalez nonetheless predicts demand will remain “really strong.” Inventory will likely remain constrained for the better part of this year, but will hopefully “pick up” in the summer as peak buying and selling season approaches, he added.
He anticipates home prices will rise nationally about 6 percent or potentially higher, partially due to high demand and partially due to few entry-level homes available. “We think builders will start moving into that space. We saw some of it last year, but obviously it hasn’t been enough to make a dent,” Gonzalez said.
He cautioned that his home price forecast was an aggregate view for the entire country. “Obviously that also varies a lot for the local market,” he said.
KW will be closely watching Federal Reserve policy as it relates to mortgage rates, which currently stand around 4.4 percent. The company expects three interest rate increases this year, but there could be more if inflation rises above 2 percent, according to Gonzalez. Still, KW is “not too concerned” about inflation rising past that point, he said.
Regardless of market conditions, he expects KW’s growth to continue.
“We’ve always been strong with our growth regardless of what the market’s doing,” he said.