San Diego County voted 56% Clinton, and 39% Trump. Could the election result discourage home buyers, and slow down our real estate market?
Just before the election, real estate site Trulia asked voters how they felt about the possibility of buying a home in 2017. Then, after it all went down, they asked again a few weeks later.
If you’re looking to sell a house in places like West Virginia, Texas, or certain parts of Pennsylvania, the results were encouraging. Less so in the Bay Area.
Survey respondents split on entirely predictable party lines: Republican enthusiasm for investing in a new home shot up 26 points after November 8. Democrats’ confidence in the same plunged 23 points.
The report doesn’t mention how those with no affiliation to either party feel. Trulia economist Ralph McLaughlin tells Curbed SF that, in general, independent and third party voters seem to have grown discouraged, although it’s hard to tell whether the dip is statistically significant.
On one hand, this would appear to be terrible news in San Francisco, where Democrats run the show and where Bay Area voters were part of the most vigorously anti-Trump turnout in the entire country.
On the other hand—actually, there is no other hand. Almost no one seems to be able to foresee a potential future in which the Trump administration is not at least a little bad for San Francisco’s market.
- Redfin economist Nela Richardson pointed out in November that mortgage rates climbed immediately after election day.
- Paragon Real Estate’s Patrick Carlisle noted that even a small increase in interest rates could shove potential buyers into the abyss in a competitive market like SF.
- Mansion Global (a luxury real estate site owned by Forbes) speculated that the critical Chinese buyer market may become skittish of American investments in California.
- And Pacific Union’s Selma Hepp noted that while markets seemed to warm up to Trump, things like increased inflation and scuttled trade deals from his policy promises would probably put a scare right back into them.
Those in an optimistic mood could point out—correctly—that this is mostly speculation.
While local voters (and home buyers) feel down in the dumps about the future, when push comes to shove they might still do what they would have anyway in a highly volatile market.
But that’s the thing: It’s not exactly encouraging when the likely best case scenario is just breaking even.
Interestingly, most of the analysts cited above noted that despite his extensive background in real estate, the president-elect didn’t articulate any housing plans during the campaign.