San Anselmo, Marin housing market

Trump win may shake up Bay Area housing market By Kathleen PenderNovember 16, 2016 Updated: November 16, 2016 7:55pm 2 Photo: Michael Short, Special To The Chronicle IMAGE 1 OF 3Realtor Joan Kermath of Sotheby’s International Reality, right, speaks with broker Lynn Reid of McGuire Real Estate, during a broker’s open house for a condo in Sausalito, CA Wednesday, November 16, 2016. Since Donald Trump was elected president last week, mortgage rates have jumped by half a percentage point and tech stocks have fallen. That could put a damper on the Bay Area real estate market if it persists. You’d think having a real estate tycoon in the White House would be good for real estate. And it might be. Some of his proposals — such as boosting infrastructure spending and cutting mortgage regulations — would be bullish. But they could have side effects that offset the positives. For example, Trump’s plan to boost infrastructure spending and cut taxes would stimulate the economy and give people more income to spend on housing. But it would also increase the deficit, which probably would raise inflation and interest rates, making homes less affordable. The prospect of higher deficits has caused an uptick in interest rates, including mortgage rates. It also caused a sell-off in tech stocks, as investors rotated out of those into ones that would do better under Trump, especially banks, which could benefit from rising interest rates and financial deregulation. That trading strategy has reversed itself a bit in the past two days. Photo: Michael Short, Special To The ChronicleBroker Bjorn Sandberg of Pacific Union, left, talks with realtor Joan Kermath of Sotheby’s International Reality during a broker’s open house Joan is hosting in Sausalito, CA Wednesday, November 16, 2016. Trump’s vow to “dismantle” the Dodd Frank Wall Street Reform and Consumer Protection Act could make home loans cheaper and more readily available, especially for people with weak credit. “That could offset some of the higher interest rates,” said Chris Thornberg, founding partner of Beacon Economics. “Standard mortgage lending would go up if Dodd Frank is repealed,” said Andres Carbacho-Burgos, a senior economist with Moody’s Analytics. “That’s good if you think mortgage regulations are too tight. The longer-term risk is that sooner or later the pool of good borrowers will run out and mortgage lenders will start looking for the same type of borrowers they were looking for in 2004-05.” If Trump deports undocumented immigrants and builds a wall to keep out new ones, demand for apartments could drop, because most of them rent. Legal and illegal immigrants and their descendants could account for 88 percent of population growth over the next 50 years, according to the Pew Research Center. Reduced demand, combined with new apartment construction, “could create a surplus of housing in certain parts of the country. The Bay Area could be one of them,” said Ken Rosen, chairman of the Fisher Center for Real Estate at UC Berkeley’s Haas School of Business. That could put downward pressure on rents and tilt the rent-or-buy decision toward renting for some people. Trump’s plan to boost infrastructure spending comes at a time when the construction industry “is operating at full capacity, at least in labor terms,” Carbacho-Burgos said. “If the Republican Congress and Trump are serious about engaging in as many deportations as they can and choking off illegal immigration, the construction industry could be subject to some manpower losses.” His firm estimated that 13 to 14 percent of construction workers in 2012 were undocumented. If a worker shortage slows construction of multifamily homes, “I see a slightly higher upward pressure on rents,” in the short-term. “If he is serious about deporting all 11 million illegal immigrants, then rents will go down.” Trump’s threat to slap tariffs on imported goods, especially from China, could result in fewer foreigners buying U.S. real estate. “If he does what he said, he might upset the offshore capital flow. China might retaliate. They might really crack down” on money flowing into the U.S., Rosen said. On the other hand, “we could get more buyers from Russia.” Tech workers have been a force in the market, and a prolonged decline in tech stocks could leave them with less buying power. But within tech, “there are winners and losers. Certainly the alternative energy companies stand to lose because he doesn’t want any preferential treatment of any particular energy sources,” said Selma Hepp, a vice president of business intelligence with Pacific Union. But biotech stocks got a bump after the election. Trump’s platform includes reforming the Food and Drug Administration. Meanwhile, large tech companies such as Uber, Airbnb and Palantir could finally go public “if we get an uptick in confidence,” said Patrick Carlisle, chief market analyst with Paragon Real Estate Group. “When you add 6,000 more millionaires to the mix, that could make a difference.” David N Swaim Owner/Realtor -107078 Town of San Anselmo Planning Commissioner 415 710 5504 phone/text Tamrealty.com 609 San Anselmo Ave San Anselmo CA 94960

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