There is both positive and negative signs that Pres. Trump presidency could impact our Boston condo market in 2018
Lets start with the negative first. For starters, interest rates went up the day he won the election and continue to rise; rates are already a half point higher than they were pre-election. They are still low by historical standards, though. But I see interest continuing to rise in the near future, which makes borrowing more expensive. Short term we may see an increase in Boston condo sales as those buyers sitting on the fence jump into the market before rates continue to increase.
Secondly, I’m hearing some protectionist rhetoric as far as keeping jobs in America through policy, taxing, and penalizing companies for sending jobs outside the country. Don’t get me wrong—I love that we’ll have more American jobs, but you must understand that this rhetoric can very easily turn into inflation beyond the normal levels. I’ll be watching this very closely.
On the positive side for the Boston real estate market:
If Trump starts to do away with what he sees as liberal policy and attempts to dismantle the Dodd-Frank Act. Just as a reminder, this bill was the response to the real estate crash in 2008 and as a result implemented numerous regulations into the financial markets. In my opinion (and by most of the people in the Boston real estate industry) it was really far-reaching and over the line. Its intent was good, but it went so far that Trump is targeting it to take it a part as much as possible. He probably won’t be able to abolish it entirely, but he’d like to make it as much of a shell of itself as possible. As a result, it may make it easier to obtain a Boston condo mortgage. Time will tell. (Please note, I’m not advocating any of these positions, I’m just informing you what the impact my be as it relates to the Boston real estate market).
As stated above, I see looser lending enter into the marketplace later in 2018. We’ll have to watch and see if looser lending also goes over the line. Can it get to the point where it makes sense, and then goes beyond that point? I want to be clear that I’m not predicting that we’ll see the same thing as we did in the last real estate crash. Looser lending will, however, could lead to more distressed real estate later on once buyers start to default on loans.
If you have any questions about the Boston condo market or you’re thinking about buying or selling a home, give me a call or send me an email. I’d love to hear from you. I can be reached at 617-595-3712 or via email at email@example.com
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Updated: 1st Q 2018