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WHAT WILL A TRUMP PRESIDENCY MEAN FOR THE REAL ESTATE MARKET?

It has now been almost two weeks since America voted in Donald Trump for president. Regardless of which side of this election you were on, the results sent shock waves across not only our country, but the entire world.

Of course the predicting and prognosticating had gone on long before election day, much of it about the economic policies and repercussions of a Trump presidency. All year the markets had been reacting negatively to even slight upticks in Trump’s pre-election poll numbers, so when Trump pulled out the electoral college shocker, even the average investor braced for a drastic market turn. It never came. So fart, the market’s reaction to president-elect Trump has been a collective shrug.

But for our readers more specific purposes, what might a Trump presidency hold for the housing market? Of course, with all things Trump, the best housing experts can do is to agree to disagree.

“We can make sense of this surprising outcome if we recognize that every voter is a housing voter,” said Nela Richardson, Chief Economist of Redfin. “Though America’s growing housing affordability crisis was largely absent from the election campaign, it is a singular issue that cuts across all segments of voters, affected in one way or the other by home and rental prices.”

“Where people live affects their job opportunities, the quality of the schools their kids attend, and in turn, the economic mobility and productivity of our country and its citizens,” Richardson added. “As a country we need to enter a new chapter in housing policy, one that disrupts old ways of thinking and embraces a path of inclusionary growth and shared prosperity. America’s electorate requires nothing less.”

One thing we can all agree with Richardson on is that housing was almost entirely absent from both parties campaign platforms. That only brings more uncertainty to the market, no one is even pretending anymore to really know what a Trump presidency means for the overall economy, much less the housing industry specifically.

“This is very much a step into the unknown because we simply can’t know what type of President Trump will be,” Paul Ashworth said, Chief Economist of Capital Economics. “Will he be the demagogue from the campaign trail, who threatened to lock up his political opponents, punish the media, build border walls and start a global trade war? Or is he capable of becoming a statesmanlike figure who leads in a more measured manner?”

“Given the adverse market reaction we have already seen, the Fed’s planned December rate hike is now off the table,” Ashworth said. “There is a possibility that Fed Chair Janet Yellen and even some other Fed Governors (Lael Brainard?) will resign immediately.”

So here we finally find some common ground. Multiple experts agree that Trump’s “lack of focus” is causing a lot of uncertainty. Even the markets appear to be guessing what decisions this president-elect will make.

“Perhaps most uncertain about a Trump presidency is what will happen to housing markets because of policy change,” said Trulia’s Chief Economist Ralph McLaughlin. “Trump hasn’t much discussed housing policy during his campaign, but he has hinted to ‘Make America Great Again’ by boosting the homeownership rate through demand-side policies, such as financial deregulation, rather than through supply-side policies such as reducing local impediments to new supply.”

“Like other markets, prices are likely to rise further if policies lopsidedly target demand without also addressing supply,” McLaughlin said. “In few other industries than housing is addressing supply equally as important as demand for mitigating affordability pressures, and we advise President-elect Trump to take a more balanced approach to the housing market as President Obama.”

While most experts agree on the level uncertainty, some think that Trump will be good for the overall economy in general and the real estate market specifically.

“We expect a rate increase in December to be put firmly back on the agenda in coming weeks,” Edison Investment Research analyst Alastair George said. “The sharp decline in market-implied odds for a December rate increase is anomalous in our view.”

“There will be very limited changes in the employment and inflation data by December and we believe a rate increase has been clearly telegraphed in recent FOMC statements,” George said.

Here’s one expert arguing that a drop in the stock market after Trump’s surprise victory was normal and expected.

“Global markets were shaken earlier in the day after Trump swept to victory ahead of Hillary Clinton,” said Nigel Green, deVere Group founder and CEO. “This was expected as Trump was the outsider who represents uncertainty, which always creates volatility in the markets.”

“However, financial markets have recovered somewhat after Trump’s acceptance speech due to its notably conciliatory tone and content,” Green said. “It offered reassurance and the markets have responded accordingly.”

Some experts and their associations took a more cautious, wait and see approach. Take the Mortgage Bankers Association who issued a congratulatory statement to Trump but urged him to look further into the industry’s future needs.

“It is critical that President Trump focus on three main areas – ensuring an adequate supply of affordable housing, bringing first time homebuyers back into the housing market and ensuring certainty in regulations,” MBA President and CEO David Stevens said.

Again, there isn’t much we can say definitively at this point. A Trump presidency remains a mystery from the smallest appointments to the largest policies. Even that once all-but-certain economic adjustment, a December rate hike by the Fed, is now anything but.

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