There’s a Real Estate Guy Going to the White House. (Time for a Second Home?)

Smoke reminded us, as I have been reminding myself all day, yesterday’s election was basically a tie. Hillary Clinton won the popular vote, and even at 10 pm I was texting friends that I still thought she would eek out a win. That Trump fared so well in New Hampshire is amazing. But it was Pennsylvania that put him over the top with the electoral votes. And in Pennsylvania, urban Philadelphia was red; central and western Pennsylvania was blue. Smoke says blue states (Texas) should be untouched. But what about blue parts of red states?

By the way, I asked the Realtor panelists at yesterday’s DBA event where most of the migration to North Texas is coming from: California was number one, the northeast and midwest was number two. And northeastern buyers tend to prefer the master bedroom upstairs with the kids! So the voters left behind in the rust belt who voted for Trump likely have a beef with the regional economy.

James Gaines, chief economist at the Real Estate Center at Texas A&M University, is always good for a quote on the Texas market. He told Steve he expects no short term changes, but worries about mortgage rate hikes that could put a damper on buying. And he added in the uncertainty factor:

“The main result is greater uncertainty about future,” Gaines said. “Folks will either hunker down and do nothing or anticipate tougher times – i.e. higher interest rates – and try to move quicker to buy.”

Ralph McLaughlin, chief economist with Trulia.com, says kind of the opposite of Jonathan Smoke: homebuyers in blue states, that’s us,  might be more rattled, more likely to hold back on large purchases. Last night I joked that our sister blog, SecondShelters.com, might see a boost in its readership. Maybe that wasn’t a joke.

International real estate markets are bracing for buyers, according to Gill South over at Inman. Countries getting the most inquiries: Costa Rica and Ireland:

Sarah Breitlander, owner of Krain Costa Rica Real Estate, part of Leading Real Estate Companies of the World (LeadingRE) is serious about expecting an onslaught of inquiries now that the U.S. election is decided.

“For us, we have been getting more than nibbles; it’s been huge bites, we’ve seen such an uptick in the past two years, it’s almost hard to keep up with demand — we have been getting contacted on a daily basis here,” she said.

Breitlander said she has been getting inquiries from buyers in Texas, Massachusetts, Colorado and California from both Democrats and Republicans. “It’s come from either side: if Hillary wins or if Donald wins,” she said before the results came in. “The message is: I’ll be down there.

Apparently Canada’s immigration website crashed last night as the votes turned in Trump’s favor.

There were a lot of “lean-in” votes, that is, voters who did not publicly admit they would support Trump but voted for him in the privacy of the polling station. These people may hope he lifts pesty regulations that burden and add to the cost of doing business.

Dallas’ Jeff Swope, commercial real estate investor and developer at Champion Partners, told Steve Brown he welcomes a businessman in the White House

“I would expect a short – very short pause – and then back to business as normal,” said Jeff Swope, who heads Dallas Champion Partners. “The great news is that there is a businessman as president – should mean an opportunity to lessen some of the insane regulations being forced on businesses.”

Regulations certainly add to the cost of building. But would Hillary Clinton have helped keep interest rates low? Commercial Real Estate experts tells Bisnow the Fed is now stuck between a rock and a hard place:

“The Federal Reserve is now in a can’t-win position where if they raise the rate in December it will be seen as trying to invoke policy before the new president takes office and has a chance to offer his views,” Jack Kern, director of research at Yardi tells Bisnow. “[But] if they fail to raise rates, it will be seen as a political decision implying they are trying to curry favor with the new Trump administration.” However, Carl R. Zwerner chair of economic forecasting at Georgia University Rajeev Dhawan is convinced a December rate hike will commence, taking the reaction of the 10-year bond market as an indicator.

Jonathan Miller thinks that rates are going to remain low for a while at least, which is ultimately is a good thing for housing, but not necessarily a great thing for the overall economy. Look for resignation letters from Janet Yellen and others in the next few weeks:

“This is very much a step into the unknown because we simply can’t know what type of President Trump will be,” Capital Economics Chief Economist Paul Ashworth said. “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.”

One positive outcome of a Trump presidency could be a relaxing of the Dodd-Frank Act, a complicated noose that tightened capital requirements for banks and made it harder for consumers to obtain mortgages.

There simply has not been much talk from the campaign about housing policy (or anything, save for “Make America Great Again”) but Trulia Chief Economist Ralph McLaughlin said Trump hinted that to ‘Make America Great Again’ you have to boost home ownership through demand-side policies, such as financial deregulation, rather than through supply-side policies such as reducing local impediments to new supply.

I mean, Trump does own several homes. And Hillary recently bought the home next door, their third million dollar manse. Her timing may have been perfect.