The imminent Donald Trump presidency, whether that incites optimism or pessimism in Americans, holds unknowns about most issues of policy, including housing.
While some are assured Trump’s business and real estate development interests will mean pro-growth incentives and regulations, others fear that the uncertainty surrounding his leadership will shake key variables on which market stability depends.
In the days since the election, analysts have pointed to the president-elect as the cause for spiking mortgage rates and investors pulling out of bonds. Trump has promised to deregulate the building industry, though analysts wonder if his immigration policies might purge the industry of its labor pool and curtail foreign investment. Initially, analysts predicted a Trump presidency would prevent a hike in interest rates; now it seems assured in December.
Housing wasn’t a focal point of Trump’s campaign. While builders and real estate developers are optimistic that the president-elect shares their background, the predominant theme among housing and financial experts is: Who knows?
“I don’t know that Donald Trump will create any immediate change, because nothing is immediate,” said broker Karen Overington. “He is a real estate investor, and I do believe that he looks fairly well upon that market. But understand, we are the cornerstone of the economy. If real estate gets the sniffles, the economy gets the flu. I think he understands that.”
“We’ve been riding a lackluster recovery for a long time, arguably since 2012,” said Paul Beasley, president of the Home Builders Association of Southwest Colorado. “We’ve done better and better, and the land sales and housing stats are better this year and are projected to be a little better in 2017, if not the same. But 2018 – we have to see what happens with the overall world economy and interest rates. I think so many of Trump’s policies are yet to be formulated, so we don’t know. That said, he’s a real estate guy.”
Beasley said since Nov. 8, activity has picked up noticeably.
Speculation that the stock market would be rattled prompted concerns about high-end luxury home sales. While the pre-election pause on purchasing is expected to continue for a while in some larger markets, so far, activity in Durango is doing well, particularly at the resort.
“At the resort this particular election cycle, we noticed market anxiety earlier in the year, and less as the election approached,” said Heather Erb, managing broker at Durango Mountain Realty. “Now that the election is over, we are seeing a great deal of activity, regardless of our clients’ political preference. We have a client so certain the markets will tumble, they are cashing in their stocks to purchase real estate, whereas mostly we are noticing bullish investors at a time we usually consider ‘in-between seasons.’”
Statistically, presidential election years haven’t impacted real estate transactions.
Data from the Durango Area Association of Realtors reflects no exceptional deviation from the norm in the number of homes sold in 2000, 2004, 2008 and 2012. Home sales in those years across the board remained stable, save for 2008 in which sales tumbled in the Great Recession.
“The old rumor was that everything slows down before an election, but I think people get cynical and don’t think any president is going to make a difference,” broker Gina Piccoli said. “The only way it could is if the markets are affected by what people thought was going to happen, and there’s no way of knowing that. I know mortgage rates went up, and people pulled out of bonds and put money in stock, but not because they were scared. It could be because they thought stock was going to do really well.”
Whatever Trump’s future policies and regulations may be, they could impact Durango’s generally insular housing market because it’s largely influenced by outsiders coming in to buy second homes.
“So much of real estate is about confidence,” Realtor Don Ricedorff said. “When people feel confident is when they buy homes. If you think about a second home, by nature, you don’t need it. It’s a lifestyle choice, and it comes down to confidence that the economic situation is solid. I think because Trump is for growing the economy, people will have that confidence. The opposite would be true if the new president was anti-economy.”