The election has been over for three days now, and most people have had a chance to sit back and look forward. Election night was full of firsts. Naturally, it will be followed by several questions. One of the most common my clients have is, "what does this mean for the real estate market moving forward?"
As a member of the National Association of Realtors (NAR), I had access to a post election discussion hosted by NAR’s Senior Vice President of Government Affairs Jerry Giovaniello and Political Consultant Doug Sosnik. The Realtor Political Action Committee (RPAC) has had a very busy year lobbying on issues including tax on real estate services, rent control, affordable housing, and much more.
At the NAR event, Realtors from all over the US had an opportunity to ask questions. The biggest question at hand was, "what will Trump do to the Real Estate market?”
We all know that reducing regulation was a big platform for Trump. What does this mean for home buying? Over regulation adds to the cost of an affordable home, and it might be time to take a deeper look at this. For example, Banks will most likely see regulatory changes when it comes to lending. The Dodd-Frank Wall Street Reform and Consumer Protection Act was a big topic of conversation. This act was initiated in 2010 in response to the financial crisis of 2008. It protects borrowers from abusive lending and mortgage practices by bankers. It also required banks to increase reserve requirements. Smaller banks may experience a relaxation on regulations, and lending may get a little easier. On the other hand, the artificially low rates we have enjoyed for the past few years will almost certainly go up.
There was a lot of talk about flood insurance. The current flood insurance program is running a 24 billion dollar deficit, and it seems that flood insurance is an extremely difficult topic to agree on nationwide. Nevada, Florida, and Louisiana have very different views about flood insurance. This is why the issue pops up yearly and doesn’t look to be resolved any time soon.
Another significant thing to think about moving forward is the 2018 Governor elections. This will be a large and impactful class of new Governors, and it will be important for the RPAC to stand behind and support the governors that align with the RPAC initiatives. It is important to stay in a healthy lending market that protects buyers from overextending, but it is also important to keep regulations on home buying reasonable so that affordable housing can continue to be an option.
It does make me hopeful to think about all of the Realtors nationwide using a grassroots approach, through the NAR and RPAC, to act on the real issues that keep home ownership a possibility for all. Members of Congress do look to NAR for guidance. There are so many Realtors nationwide that can truly communicate real issues to Government officials.
Real estate is an important part of your investment portfolio, Not only is it likely your single biggest investment, it is something you can use and enjoy everyday. I always tell my clients that you can’t sleep in your 401K, and you can’t host Thanksgiving dinner in your kids' 529. The real estate market is robust and doing well. Despite your views on the outcome of this historic election - and there are certainly many - the future of real estate looks bright.
Cheers! - Regan