A new article over at Realtor Magazine starts this way: “We can expect a hot year in home sales in 2017, ...” This got me to thinking, and I had to dig into current events a bit in addition to market forces. Some points in the article:
• Existing home sales to hit 6 million in sales this year.
• Fannie Mae and Freddie Mac are more upbeat, predicting 6.2 million sales.
• New home starts are expected to tick up a bit to 1.5 million/year to 2024.
• Fannie Mae and Freddie Mac are more upbeat, predicting 6.2 million sales.
• New home starts are expected to tick up a bit to 1.5 million/year to 2024.
When it comes to current events, I have to give serious consideration to the presidential election. Opinions are like... well, you know, everybody has one. Mine is that nothing really major is going to happen until a while after the election. “A while” has two different meanings based on which party is elected.
Democratic President
Of course, what politicians say during the elections is suspect, but generally the consensus is that electing another Democrat will continue many if not all of the economic policies of the past 8 years. Plus, we’ve heard that the Democratic candidate intends to raise taxes, almost across the board. This of course will not put a lot of excitement into buying a home and adding real estate taxes to higher federal taxes.
Of course, what politicians say during the elections is suspect, but generally the consensus is that electing another Democrat will continue many if not all of the economic policies of the past 8 years. Plus, we’ve heard that the Democratic candidate intends to raise taxes, almost across the board. This of course will not put a lot of excitement into buying a home and adding real estate taxes to higher federal taxes.
Should our next president be a Democrat and these statements prove mostly accurate, we’re not going to see a major surge in buying, in my opinion, for 4 to 8 more years. This bodes well for rental property investors and wholesalers who feed them properties. More renters, higher rental demand and higher rents will keep us on our current roll.
Republican President
This one is a wildcard sort of thing. If the transformation as touted in campaign rhetoric actually partly or mostly happens, the economy should respond positively with jobs and higher wages. This will spur home buying.
This one is a wildcard sort of thing. If the transformation as touted in campaign rhetoric actually partly or mostly happens, the economy should respond positively with jobs and higher wages. This will spur home buying.
However, even if these reforms are enacted, we’re probably looking at two or more years before they begin to really change people’s economic lives. However, they could get excited about the coming better times and tick up home buying a bit in the first couple of years after the election.
Should buying pick up quickly, this doesn’t necessarily mean tough times for rental properties and investors. It could be a time to roll some of your properties with 1031 Exchanges into another price range home or possibly into multi-family or commercial properties.
Sometimes I get a bit cynical about the National Association of Realtors® ads that always say “It’s a great time to buy a home.” But, when I think about it, I can’t really think of a time when it hasn’t been a “great time to invest in real estate.” The difference is that the retail buyer is trapped in a single strategy situation with risk factors they can’t control. Will they keep their jobs? Will their home rise in value?
The real estate investor can choose from several strategies, each with different market exposure. They can make money when markets rise, fall or sit still
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