Vision Speech

Once again, Keller Williams associates had the unique opportunity to gain expert insights on U.S. and Canadian housing trends, as well as some highly anticipated industry trends for the upcoming year.

In Gary Keller’s annual Vision Speech, the co-founder and chairman kicked things off with an in-depth discussion about how the U.S. and Canadian housing markets performed last year and what is predicted for 2017. Following this discussion, Keller focused on select market segments including luxury and commercial.

Here is a look at the numbers you need to know to be the local market expert.


Home Sales

In 2016, 5.45 million homes were sold, up from 2015, making it the most homes sold in the LAST DECADE. Keller said the trend could slow if interest rates rise, but cautioned that interest rates haven’t been easy to predict and foresight may prove to be elusive.

Nonetheless, wage increases seen in 2016 are expected to continue in 2017, helping home buyers, and if inventory remains low, multiple offers may persist.

Home Prices

The median home price for 2016 was $233,900 – which was 5 percent above 2015 and in what is considered a “sustainable range.” Price growth for 2017 is forecasted to be in the 3 to 6 percent range, leaning closer to the lower end.

Looking at the trend line over the last several years, we see that we remain 16 percent below the 1989 trend line.

While slight increases in home prices are expected for 2017, Keller noted that rising interest rates will have a dampening effect on price gains, with the most certainty we have had in recent years. However, rising global political and economic turmoil could still force rates to stay low.

Real estate agents should pay close attention to national and local market trends in 2017 so they can best serve their clients.


Keller looked at four factors concerning the continued contraction in inventory levels:

  1. Inventory is estimated to have averaged 4.4 months in 2016 compared to 4.8 months the previous year.
  2. We have not seen inventory rise, corresponding with the dip in price growth due to a shortage of inventory in entry-level housing.
  3. Builders now appear to be making efforts to target entry-level markets (D.R. Horton Express Homes).
  4. We should see some improvement in inventory in 2017, but it will likely remain low.

DID YOU KNOW: The lowest inventory level since 1999 was 3.6 months in February of 2005, but we just tied this level again in December 2016.


Mortgage Rates

Mortgage rates averaged 3.65 percent in 2016, providing continued momentum to home sales throughout the year. What can you expect for 2017? Keeping in mind that the Federal Reserve only raised rates once in 2016, it does seem poised to make additional increases in 2017 if the current economic situation stays on track.

MARKET EXPERT TIP: Federal Reserve movements are dependent on economic conditions, and any perceived deterioration could cause rate increases to be delayed.



In 2016, affordability was flat despite growing home prices due to persistently low mortgage rates. Last year, the average family spent 15.1 percent of their monthly income to pay their mortgage. For first-time home buyers, this number was closer to 25 percent.

Moving forward, affordability will likely worsen as interest rates and home prices continue to rise.

Since no conversation about the state of the housing market is complete without a look at the whole economic picture, Keller went into an in-depth discussion about four segments of the U.S. economy:

Gross Domestic Product (GDP)






Keller also took an in-depth look at the Canadian housing market. Here are the key points to know:

Home Sales - Home sales accelerated for the fourth consecutive year in 2016, posting growth of 6.3 percent and total sales of 536,118 homes.

Home Prices - Home prices continued to rise rapidly in the largest cities, contributing to an 11 percent rise in average prices this year in Canada.

Inventory - For the first time since 2007, the sales to new listing ratio reached a level that indicated Canada was in a seller’s market.

Mortgage Rates - Interest rates in Canada held steady in 2016 as the Bank of Canada kept policy rates unchanged throughout the year.

Affordability - Affordability declined in both categories in 2016 as prices continued to rise throughout the year.



  1. Sides Per Agent - Sides per agent decreased slightly in 2016 as the agent population grew to 1.23 million and home sales climbed to 5.45 million.
  2. Distressed Sales - Distressed sales have probably reached a bottom.
  3. Underwater Homes - Homes continued to gain equity in 2016, further reducing the stock of underwater homes.

Federal Reserve Policy - The Federal Reserve raised interest rates in December and anticipates further increases this year.

  1. New Home Construction - Single-family home construction continued to grow in 2016 but still has not fully recovered.
  2. New Home Sales - The lack of construction in the entry-level price range has contributed to shortages, causing extremely low inventory levels of entry-level houses in many cities.
  3. Home Ownership - The rate of home ownership has steadily declined while the share of households living in single-family homes has been relatively steady.
  4. Single-Family Rentals - The percentage of single family homes that are being rented has steadily increased.
  5. Student Loan Debt - Student loan debt continues to grow and is often a concern for first-time home buyers.
  6. Oil Prices - Oil prices rose in 2016 but remain low compared to prices seen over the last decade. This will help cities with oil-driven economies but may raise some costs for consumers.