Campaign Promises can ‘TRUMP” Arizona’s Real Estate Market?

The Trump effect on Phoenix real estate

Does the recent election have consequences for our local housing market?

Well, the election is over and many are curious to know if 2016 campaign promises will “trump” Arizona’s real estate market. Some of you are elated with the results, and many lie somewhere between anxious and terrified about what the future will bring. As far as campaign promises go, there are three in particular that could have a significant impact on the  housing market according to Tina Tambour of the Cromford Report.

Trump promises to deport millions of undocumented immigrants

The Phoenix New Times reports that in 2014 there were approximately 325,000 undocumented immigrants in Arizona and guess what? Each one of them lives somewhere. Should even a partial deportation take place, the effect on our real estate market would be significant. The resulting increase in vacancy rates of  homes in the valley would create negative conditions for our housing market. KTAR.com, a neutral yet somewhat conservative leaning Arizona news outlet reports that decreases in legal and illegal immigration could have a negative impact on the Arizona economy as a whole.  They reference a University of Arizona report that shows immigrants, both undocumented and legal, bring a net annual tax revenue of 1 billion dollars into the state. Imagine the consequences of that evaporating driver of our economy.

Trump promises to undo NAFTA

Soundbites about the North American Free Trade Agreement abound. If that’s as far as you go in understanding its regional impacts, you are missing the point…especially in Arizona. While NAFTA has had a negative impact on the economy of some US regions, others have benefitted greatly. Due to our location, our strongest trading partner is Mexico. And exports to Mexico far exceed imports. Any “renegotiation” of our trade agreement could result in major decreases in our ability to export goods. This would seriously effect our economy in a negative way.

Trump promises to roll back bank regulations

Say the phrase “Dodd-Frank” to anyone in the mortgage industry and watch what happens. Have you ever seen the incredible hulk? I’m not saying lenders turn green and sprout muscle at the term. But they do get ANGRY! The regulations that were put in place following the housing crash (which many believe was caused by under-regulation), are often blamed by lenders for tightening restrictions on who can qualify for a mortgage.  Turning back those regulations turned back may result in more potential qualified buyers for homes across the nation. So that could be a shot in the arm to the Phoenix and other housing markets as the buyer pool would expand. In particular, first time buyers could come out in greater numbers as lending requirements loosen.

There are many other variables that economists will be paying attention to over the next several months. Some questions to be concerned about:

How does the administration and it’s cabinet nominees feel about the mortgage interest rate deduction?

How will the many Trump promises that seem to be sticking be paid for? Increased military spending, infrastructure investments, tax cuts?

And for goodness sake, what does Russia think?

 

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