What is the consensus on the Trump impact on our local real estate market?
After speaking to agents on broker preview the last couple of days, I think we can divide the buyer pool into two camps:
- There have never been more reasons to wait-and-see.
- But some buyers will want to hurry it up, before anything else happens.
Yellen made it sound like the next Fed move is imminent, which hopefully means next month. There is 1/4% (or more) already baked into the market, so if they do bump the Fed Funds rate, it should have a calming effect on mortgage rates – it did last time. If we can stay around the current 4%, it should motivate people to buy before it goes higher.
But there is also the anxiety that comes with buying or selling that gets aggravated by uncertainty. Have you ever felt more desire to hunker down?? The motivated buyers and sellers want to get it done.
I think we will see a very active selling season – and it already is!
NSDCC October Sales and Pricing
| Year | |||
| 2012 | |||
| 2013 | |||
| 2014 | |||
| 2015 | |||
| 2016 |
Our current momentum should carry us well into 2017. But look at the stumble in 2014 – I’m more worried about 2018.
Trump is between a rock and a hard place. How he deals with the fed will show what kind of president he’ll be going forward. During the election trump said that the fed was artificially holding down interest rates. (which they are) He also hinted that he’d address the issue. The problem with this is that “fixing” the problem means increasing interest rates. Nobody wants to take the medicine and the longer it gets put off the harder it will be to swallow.
My gut feeling is that Trump will cave against the bankers giving them what they want. In return bankers will hold down interest rates. It’s just going to take some time for the two groups to find a common space.
The property market is always in a boolean logic tri-state.
The market will either get better, get worse, or stay the same with inflation always guaranteeing that in the long term prices will always rise all other things being equal.
If his tax proposals go through the market will do very well for the next couple years, especially the high end. Anyone buying a $1mm+ house will save more on taxes than the cost increase from higher mortgage rates. Someone receiving the bulk of their income from s corp distributions could see their federal rate go from 40%+ to 15%.
Not saying I agree with the proposals, but they’ll have a big impact on the market in the coastal areas.