Stunted inventory growth delivered another one-two punch to Keller Williams, with the Texas franchisors’ transaction volume, new listings, projected closings and written contract volume decreasing for the third consecutive quarter, according to an earnings report released Thursday.
From April 1 to June 30, Keller Williams agents closed 10.7 percent fewer transactions (328,100) and listed 3.9 percent fewer homes (205,900). Agents also experienced a 12.2 percent decline in written contracts (i.e. projected closings); with the volume for those contracts dropping 1.5 percent year over year to $158.6 billion.
Despite the decline in transaction volume and listings, Keller Williams still managed to eke out a 1 percent annual sales volume increase, from $145.3 billion in Q2 2021 to $146.8 billion in Q2 2022.
Chief Operating Officer Sagal Patel said he’s “pleased” with the company’s Q2 performance, and noted Keller Williams will continue to double down on training, coaching and technology to help agents expertly navigate market normalization.
“Our agents are thriving in highly dynamic housing market conditions,” Patel said in the earnings release on Thursday. “We are pleased with our performance and saw record-breaking sales volume in Q2.”
“Looking ahead, we see the market balancing from the effects of unprecedentedly low mortgage rates and inventory constraints,” he added. “Yet, no matter the market, we will continue to deliver our industry’s best training, coaching and technology that allow our agents’ businesses to thrive.”
In a separate emailed statement to Inman, a Keller Williams spokesperson provided additional context to the company’s modest sales volume increase, saying the abnormally robust pace of the past two years has skewed this year’s earnings.
“[Q2’s] numbers are impacted by the base effect of Q2 ’21,” the statement read. “When compared to the more normal housing conditions we experienced in Q2s of 2018 and 2019, there’s a growth trend. We’re positioned well to take market share as housing conditions balance out.”
As a privately-owned company, Keller Williams is not required to share its revenue, profits or losses in earnings reports such as the one released Friday, as a previous Inman article explained. If the franchisor decides to go public in the future, it will be required to report those statistics.
In Q2, Keller Williams added 3,098 net agents, with 176,438 agents operating in the United States and Canada and another 16,304 agents operating in Central and South America, the Caribbean, Europe, the Middle East and Asia.
KW President Marc King and KW Worldwide President William E. Soteroff both said they’re proud of the brokerage’s growth domestically and internationally, which is the result of their recent initiatives with agent networking and education communities.
“In Q2 ’22, we surpassed 176,000 agents across the U.S. and Canada – a historic feat,” King said. “And, we continue to attract agents at such a clip because we maintain a strong culture and community that offers limitless growth for real estate entrepreneurs.”
Added Soteroff, “We’re marking another successive quarter of aggressive international growth. With more than 16,000 agents outside of the U.S. and Canada; we again experienced double-digit percentage gains across most productivity metrics.”
Keller Williams’ earnings come on the heels of a dramatic Q2 that saw founder Gary Keller singled out as the ‘head of conspiracy’ in the Sitzer federal commission case, another round of layoffs at Keller Mortgage, and the sudden departures of former kwx CEO Carl Liebert and former KW Chief Growth Officer Tony Rogers.
Even with the twists and turns, Keller Williams’ leadership has remained upbeat about the company’s trajectory, which, for the foreseeable future, still doesn’t include an initial public offering.
“As we head into an almost certain shift, I’m certain in my belief that this is a simple business if we focus on taking care of our customers and each other,” Keller said after Liebert’s departure in June. “I’m grateful for the opportunity to serve, and I believe the future is ours. Onward.”