If you weren’t among those who were surprised by last week’s election outcome, you were among very few. Opinion leaders in every corner of the media are still scrambling to explain why their prognostications had been so wide of the mark. When your job is to help people understand the fine points of current events, it’s just plain embarrassing when you get the big picture 180 degrees wrong!
For both Riverside homeowners who will be considering putting up a ‘For Sale’ sign within the next year or so—as well as for potential Riverside real estate buyers they will need to attract—any shift in the currents in Washington are very likely to affect the market conditions they’ll encounter. There are three areas that can have profound impacts on the strength or weakness of residential home sales:
- Economy and jobs. The economic recovery of the past few years has been a major factor in the bounce-back of Riverside home values—just as the global financial crisis of 2007-08 had been the key ingredient in the real estate crash. It’s also evident that the recovery has been slow to gather momentum and feebler than hoped. The change in administrations is expected to bring major reversals in federal economic policies. If changes in tax and health care policies are forthcoming, if they succeed in boosting small business job creation, homeownership rates can be expected to climb. (Note those two “ifs.”)
- Mortgage scene. As the L.A. Times noted on The Day After, the President-elect’s campaign rhetoric included “unprecedented” criticism of the Federal Reserve. There can be miles of distance between what is said on the campaign trail and what happens when real decisions have to be made, but the calendar makes major shifts in monetary policy possible—and that is all-important in determining mortgage interest rates. The Trump White House will be able to appoint as many as five new members to the Fed Board of Governors (there are seven altogether)—including a new chairperson at the beginning of 2018. If the new Administration follows through on relaxing bank regulations, it’s expected to make real estate financing less cumbersome.
- The vibe. What can be every bit as influential as anything else is the sense of optimism or pessimism that permeates the national debate. Oh, yes; the election may be over, but the chatter is a permanent fixture. It’s also the hardest to quantify—in part because a major part of it is created by the spin that attaches to hard facts. But beneath everything is the way people feel about their own futures: promising or threatening? To create that, everything comes into play, including totally unforeseeable factors like international events, technology surprises—even the weather!
Riverside’s real estate activity is always affected by the availability of desirable properties priced to attract—and in that department, we don’t need to speculate about the future: they’re here right now. Call me!