Trump Presidency Effects on CRE

According to a recent article in the Nov 12, 2016 issue of "The Washington Post", — Jonathan O’Connell

Real estate

For the first time in history, home builders and commercial real estate executives see one of their own entering the White House. And though while they await details, they are optimistic about Trump pushing some type of stimulus their way, in the form of lower tax rates or improvements to roads, bridges, public transit and other "infrastructure.

“We feel that the results, as surprising as they are, make sense when you think about the primacy of housing. Every voter is a housing voter,” said Nela Richardson, chief economist at the housing data firm Redfin. Richardson said the portion of Americans who own their own home is at its lowest since 1965, leaving millions of Americans — particularly in areas Trump carried heavily on Election Day — unable to build wealth.

However, the candidate’s rhetoric on immigration could concern builders in cities such as San Francisco, Miami and Trump’s home town of New York.

“If America becomes more isolated and less open, it could actually chill international demand for U.S. luxury housing,” she said, “so he is going to have to square his immigration policy with the reality that foreign buyers are a critical part of the housing market.”

A turn inward on trade or immigration could stem growth for firms in a number of sectors, said Krishna Rao, an economist at the New York housing firm StreetEasy.

But there is also the chance for loosened regulations, something Trump championed as a businessman and a candidate.

“Trump has campaigned on reducing regulation, using housing and energy as flagship sectors that are over regulated,” Rao said. “This could mean that regulations around developers and home builders might be among the first on the chopping block, especially given the president-elect’s conversation about wanting to lift the homeownership rate.”