What's Next for Real Estate Following the Election?

The Weekly Recap

Good morning and happy Friday! Donald Trump pulled a Grover Cleveland, stocks and Bitcoin hit record highs following election news, the Fed cut rates another 25bps, Jerome Powell said he would not step down as Chairman of the Fed, mortgage refinancing dropped for a 6th straight week as interest rates ticked up again. The US had a very week jobs report in October and the world has welcomed another Pygmy hippo named Haggis to the world, giving little Moo Deng a run for its money as cutest baby hippo.

If you missed last weeks newsletter on New Development vs. Existing Homes: Which Is the Better Buy?, you can read that through the link.

What’s Next for Real Estate Following the Election?

Whether or not your preferred candidate won the presidential election on Tuesday, the best possible scenario still occurred. Not because one candidate triumphed over another, but because the outcome was clear and decisive. This clarity provides both the markets and the nation with a sense of direction, which is crucial for stability and forward momentum. Unlike in previous election cycles where results were delayed, or where questions of election integrity lingered, we have the rare advantage of knowing the political landscape with certainty just hours after polls closed. This outcome spares us from a prolonged waiting period, as seen in elections like 2000, when weeks went by without a declared winner, and where ultimately, the courts had to intervene.

While some may not have seen their preferred candidate win, the election’s conclusion has provided closure that allows every industry, including real estate, to resume with renewed clarity. Historically, markets of all kinds, from real estate to equities, tend to experience a lull in the months leading up to an election. This is because uncertainty creates hesitation among investors, buyers, sellers, and business owners who await clearer insight into the political and economic direction of the country. Uncertainty slows down transactions, holds back investments, and often keeps businesses in "wait and see" mode.

The landslide nature of this result swiftly erased much of that hesitation. Investors, buyers, sellers, and stockholders alike now have what they need most to make informed decisions: certainty. With a known political direction and reduced ambiguity, market participants can act with confidence.

On the tax front, a Republican White House, Senate (and perhaps the House as well), effectively eliminates the possibility of higher tax rates on capital gains, estates, income and unrealized gains. When it comes to stocks and investments, both assets are expected to benefit from lower regulation and low corporate tax rates. Markets responded aggressively with this new clarity, as the S&P 500 and other indices hit record highs in the days following the election. In fact, the S&P 500 marked its strongest post-election trading day in history. This surge reflects the optimism of investors and their readiness to engage actively in a stabilized market environment.

No single politician can "fix" the housing market, but market dynamics can be positively influence. When developers are incentivized to build and project approval processes are streamlined, housing supply can expand to meet demand. Onerous and burdensome policy proposals that are now no longer viable will relieve sellers who feared high taxes on profitable sales, while offering buyers stability through predictable tax rates—helping them more confidently plan their financial futures, whether they're saving for a first home or looking to upgrade to a larger one.

As individual sentiments about the election outcome vary, the swift resolution is an undeniable win for market stability and growth.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past WEEK as well as newly signed contracts in Manhattan.

Mortgage Rate Update

Mortgage rates inched up again this week. Purchase demand continues to be sensitive to mortgage rates in the current market environment. Purchase applications have dropped 10% since rates began to slowly rise since October.

News You Can Use

• Fed Cut Rates for the Second Time This Year Amid Election Backdrop Axios

• Powell Says He Will Not Resign Even if Trump Asks CNBC

• S&P 500 Sees Best Post-Election Day in Its History Bloomberg

• Dow Soars 1,500 Points to Record High After Election CNBC

• America’s Empty Apartments Are Finally Starting to Fill Up Wall Street Journal

• The Average Age of US Homebuyer Jumps to 56 CNBC

• The SALT Deduction Fight Is Coming Back Wall Street Journal

• JP Morgan CEO Dimon to Remain at Bank, Has No Plans to Join Trump Administration Reuters

• US Economy Added Just 12,000 Jobs in October CNBC

• Bitcoin Hits Record as Pro-Crypto Trump Wins Presidency Again Bloomberg

• Weekly Mortgage Demand Down 11% MoM CNBC

• Edinburgh Zoo Announces Birth of Haggis the Pygmy Hippo Bloomberg

The Deep Insight

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