We have had this question more than any other in the last ten months and a few weeks ago on our radio show we addressed this very topic. What will a new President mean for real estate in this country and the industry as a whole? So let’s take a look at what could potentially happen under a Clinton presidency and under a Trump presidency. I first I want to say that in the short term nothing will change. You will not see a noticeable effect on home prices, interest rates or services of the like. In the long term, it’s an entirely different story.
First, let’s look at Donald Trump and his policies that he is putting forth. The biggest impact that he could have on real estate is his tax plan and his promise to deregulate certain government policies and agencies. His tax plan would cut corporate taxes in half and personal taxes as well. The theory here is that business would have more money to expand, hire, develop and that in turn would create more revenue for the government in the long run. Now whether or not that would really work is not what we are going to debate here. One thing we would not argue over is that the plan would clearly put more money in the pocket of everyone in this country paying taxes. The question is what would the average consumer spend that extra money on? Would they use to buy or invest in real estate? Maybe. One thing that is not in debate is when the economy is strong and growing at a 3 or 4% rate real estate is appreciating, there are more transactions and everyone is making money. As far as deregulation Trump has said he would get rid of the Dodd/Frank bill and the Consumer Federal Protection Bureau. Both absolutely crushing the real estate industry under a mountain of regulation and it gets worse every year. This act alone would give a huge boost to the real estate industry in so many ways I can’t even mention them all here. If you think this is fiction then please call me and I can tell you first hand how many ways the government has crippled my business in the last five years.
Now, let’s look at a Clinton Presidency. Former Secretary of State Hillary Clinton has not said much about the real estate industry so all we have to go on at this time is some of her economic policies. She has been very open about increasing taxes and although she says it will only be on the rich we know from past experience that almost never happens. Usually, tax increases affect everyone so in principal higher taxes of any kind are not a good idea. Less money in consumer pockets has a direct correlation with their ability to spend and that includes real estate. Clinton has a long track record of favoring big government and that means more regulation. As I mentioned above any more rules and regs governing the real estate industry will again trigger either anemic growth in the sector or decline. Some would say well about her plans for a stronger middle class. Certainly, that help people purchase homes in that price range for middle America? Yes, it would but the question is at who’s expense? Where would the money come from for a stronger middle class? It would most likely come from greater taxation. It’s the old I’m robbing Peter to pay Paul. That’s not real growth in the economy that a shell game just moving around money.
In conclusion, as you can tell from the arguments above a Trump Presidency would be more beneficial to the real estate industry and most likely to the economy as a whole, but no one knows for sure. However, if there is a democrat in the White House and Republicans in the Senate and House you can game plan for more gridlock, which means nothing, will get done for four more years. Enjoy Election Day it’s one of the great freedoms of this country.
Dan Polimino is a Broker/Owner with The Hawaii Team, Keller Williams Realty Maui. Contact The Hawaii Team at 808-913-0899, team@thehawaiiteam.com.
