How Politics Impact Real Estate Markets
Politics and election outcomes are rarely restricted in their reach to state capitals or to the D.C area. Instead, their results in terms of legislation and policy changes ripple across markets, industries, and communities around the nation.
Real estate is no exception.
In fact, real estate is uniquely impacted by political campaigns and the policies that follow. Federal interest rates are partially driven (or at least influenced) by Presidential politics. Stock exchanges also respond to elections, and at all levels of government.
No Presidential candidate can move from the campaign trail to the White House without addressing home prices. Conversely, home prices are bound to experience fluctuation leading up to and following a round of national elections. One impacts the other, period.
According to Dr. Robert Shiller, a Nobel laureate in economics, “There might be a Trump [housing] boom coming.” However, as a trained academic and a deeply rational thinker, Dr. Shiller is responsibly cautious in voicing his speculations. Much will depend on the President-elect’s success (or lack thereof) in achieving his more ambitious policy aims. A rising economic tide will likely boost overall housing market health. How that boost would take shape is unknown.
Shiller continued, “…as mortgage rates rise…this thing could feed a boom.”
Without directly tying one to the next, Dr. Shiller seems to suggest that a Trump presidency could yield an overall healthier economic climate. The effect it will have on housing prices and interest rates is not known.
In responsibly communicating his position, Shiller clarifies, “I find it very hard to forecast at this point in our history because it’s such an important change in government and we just don’t know where it’s going…”
Market conditions and political outcomes are impossible to know. Shiller’s prediction is as optimistic as any skilled economist is willing to provide. Credit to Dr. Shiller for communicating on the topic as frankly as he has done; his opinion carries more weight for its measured tone.