Today, I’m explaining what influence Trump will have on the real estate market and going over my 2017 predictions.
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With the election over, I’m going to answer a couple questions about the future of the market. The first question is, “What kind of influence will the new president-elect have on the real estate market?” I’m also going to talk about my real estate market predictions for 2017.
So, what influence will the new President-elect have on the real estate market?
If there is anything we know about Donald Trump, it’s that he has a weird hairdo, he sends out horrible tweets at three in the morning, and he really knows real estate. If there is a silver lining at all, it’s that he is a real estate mogul. He is very good at predicting real estate markets and he understands our industry like nobody we have seen in office before.
He is going to put a $550 billion infrastructure and transportation plan into effect that will boost jobs and wages. This will allow people to purchase more homes. According to an article in The Wall Street Journal, only 63% of people own homes, which is the lowest in history since the United States started tracking that statistic back in 1963.
He will also implement a lot of tax code changes, which are expected to be the largest tax code changes a President has introduced since Ronald Reagan. He is going to offer a $30,000 tax exemption to married couples, which will make the tax reduction for mortgage loan interest less lucrative. This means there will be less incentive to buy.
“NEXT YEAR IS GOING TO BE A FANTASTIC YEAR FOR REAL ESTATE.”
So, the tax code changes are going to be a wash for real estate, but the infrastructure and transportation plan should give people more of their bottom line income to spend.
Now, for my market predictions for 2017. Next year is going to be a fantastic year for real estate.
The real estate market in the United States is predictable and it goes in a cycle. If you look at the chart, you can see there are peak and valleys, and then a crash, and this repeats. Almost like clockwork, every 18 years there is a cycle that is repeated.
There is a recovery phase which we have already experienced, then there’s expansion, which I believe we are about a quarter of the way into. We do not have hyper supply; in fact, one of the big things driving prices is the lack of supply, and we have interest rates going up a bit, which will ward off inflation.
The next crash in the market isn’t predicted to happen until 2024. That means the market has a lot of room to run. Sellers should be confident in selling, and buyers should be confident in buying. The rates are going to be fantastic for both.
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If you have any other questions about real estate, feel free to reach out to me by giving me a call or sending me an email. I would be happy to help you!
