The Election and Real Estate
As the holiday season is upon us I think it is safe to say we are all pleased, even if the results were not to our liking, that the election is behind us and a new year is ahead of us.
The National Association of REALTORS® has a keen interest on behalf of its more than 1.2Million members to assess how the new administration may impact the housing market and much has been written on this subject as the year ends, summarized below.
The financial markets don’t like surprises and while this election certainly qualified and the day after was indeed volatile, by the end of the week the Dow was in record territory. Financial gurus are trying to guess what comes next. Some things don’t change, for example another employment report is due to be released this month and the Federal Reserve Board’s Open Market Committee will meet afterwards with the possibility of a 0.25% benchmark interest rate increase which should have little impact if the recent rise in long-term rates holds. As I write this you can still get a 30-year fixed rate under 4% though it is expected it will likely be over 4% in 2017 with very little impact on the buying process. President-elect Trump is a real estate guy who knows the economy needs low rates and that too much stimulus spending or too severe tax cuts could affect long-term rates.
Regarding housing inventory, we closed 2016 short of the for-sale inventory in all markets and this is not expected to change. The new President will not be able to increase the available supply of buildable land or houses on the market so the accumulated unsatisfied demand is expect to continue in 2017. As a side note, I have reported for months now that inventory is down in Bradford and many other towns and this shortage has resulted in a slight uptick in prices, multiple bids on properties and a swing over to a seller’s market from what was a balanced market.
With much discussion about the 100-day frenzy ahead and the possible rescission of previous executive orders, a review of the CFPB (Consumer Financial Protection Bureau) and its disliked TRID mortgage procedures that were put in place just over a year ago may occur and may reduce some consumer costs but should not have a significant impact on the economy, though it may increase the power of the Department of Housing and Urban Development. On that subject much has been said about the choices for HUD Secretary and the impact that person will have on homeownership, low-income housing assistance, fair housing laws, homelessness, aid for distressed neighborhoods and housing development. At this time former candidate Ben Carson is the front runner with Robert Woodson, Sr. and Joseph Forgione also serious contenders. Any change in Obamacare, too, will not have a substantial impact unless it brings deep reductions in the cost of health care. Tax reform, particularly corporate taxes, a review of unaffordable entitlements, raising funds by closing loopholes, etc., may all be achievable with a President and Congress of the same party. Targeted spending on infrastructure is another area to look at as projects that are cost-productive versus those cited for pork-barrel waste will be reviewed.
One thing is for sure. It is easy to prepare an agenda for day one and then, as life events occur, those goals change and adapt accordingly no matter who is in charge. We simply have to roll with the tide and hope for success for all our leaders and our country. To that end, Happy Holidays, Happy New Year and Peace to one and all!
Recent Sales in Bradford
- 105 Howlett Road, 1969 A-Frame on .66 acres for $64,044 (foreclosure)
- 20 Woodview Heights, 2002 Colonial on 5.70 acres for $190,000
- 36 Oakdale Road, 1902 Cottage w/ROW to water on .04 acres for $220,000
- 120 Sunset Hill Road, 1940 Contemp. w/Cottage on 22.50 acres for $237,500
- Lot 11 West Meadow Road, 5 acres of vacant land for $27,000
There are 17 active and 0 pending residential listings ranging in price from $101,200 to $595,000, 19 active and 2 pending land listings ranging in price from $26,900 to $125,000, 3 active and 0 pending commercial listings ranging in price from $275,000 to $595,000 and 1 active and 0 pending multi-family listing priced at $45,000 in Bradford. 1 active residential listing, 1 active commercial listing and 1 active multi-family listing is a foreclosure or a short sale.