This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Rosslyn resident. Please submit your questions to him via email for response in future columns. Enjoy!
Question: How do you think Trump’s presidency will impact real estate in Arlington/Northern Virginia?
Answer: I’ve never gotten so many questions about the same topic before (shocker…)! Like most of you, I entered election night completely unprepared for the result, so I’ve spent a lot of time getting read up on the impact Trump will have on our real estate market. The following is a summary of my findings sans my personal politics. Chicken Littles beware, I’m an optimist!
The Outlook Is Positive
Most of what I’ve read suggests that the Northern VA real estate market stands to benefit in the short and mid term from Trump, but the long term impact is where the concern lies. Key factors include:
- Increased Defense Spending: More jobs, more office space and more money for the major Defense employers in the area like DoD, Boeing, Lockheed Martin and Raytheon should increase demand for housing, particularly in the mid and upper markets.
- Tax Cuts: The assumed tax cuts should give a number of fringe buyers enough cash to cover a down payment sooner than they expected. I wonder if this will encourage developers to convert large multi-family buildings from rental apartments to condos.
- Deregulation: Expect major deregulation on banks (Dodd-Frank) and home building to make it easier and cheaper to build new homes, thereby increasing the housing supply, which, in Arlington, is less than half of what economists say it should be in a neutral market. I do expect we’ll see increased demand well before an increase in supply.
- Markets: After the election-night 5% tumble in futures, domestic markets have responded positively, signaling faith in the economic impact of Trump’s presidency. Strong markets tend to signal strong real estate growth.
Still Too Much Uncertainty
Ken Harney, Real Estate writer for the Washington Post, recently admitted, “It’s still too early to assess [the new reality of the real estate market].” Despite early optimism from many industries, a lot of it comes down to Trump’s design and implementation before we can determine the impact. Here are a few major questions:
- Foreign Policy: Trump’s foreign policy changes project to be the biggest destabilizing factor of his presidential agenda and poorly executed foreign policy could easily trump (pun intended) any domestic growth. It’s way too early to start guessing how his foreign policy will impact local real estate, but it’s not too early to start hoping he gets it right!
- Fannie/Freddie: One of the biggest questions facing the residential housing market is how Trump will handle Fannie Mae and Freddie Mac, makers of the mortgage industry. Trump has spoken about dissolving these institutions, but hasn’t said much about what would replace them. If he leads a major attack on Fannie and Freddie, look out for drastic changes in access to credit and mortgage rates, for better or worse.
- Interest Rates: It’s time for us to stop telling consumers where we think mortgage rates are going, especially now that there are so many questions about the economy and turnover on Fed’s Board of Governors. Lynn Fisher, VP of Research and Economics for the Mortgage Bankers Association said interest rates might rise from the current 3.6 percent to 5.4 percent by 2019, but she added, “We’ve been wrong continuously for the last couple of years.”
Remember Where You Live
Arlington (and DC Metro) real estate remains one of the most stable real estate investments during difficult economic climates. We faired well during the Great Recession and Business Week ranks us among the top places to live during a recession. Strong fundamentals including Federal Government/Contractor jobs and valuable infrastructure like the Metro and an industry-leading fiber optic network support the local housing market.
The best advice I can give (mostly stolen from Warren Buffet) is don’t try to time the market, bet on America in the long-term, and make real estate decisions based on the needs of you and your family, not the talking heads on CNBC. Oh, and if you decide to bury gold in your backyard, do it quietly, after midnight and during a New Moon.
Here are some good articles I’ve found that hit on a range of topics that impact the local and national real estate market:
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.
The four people reported to be seriously injured when a car plowed into Ireland’s Four Courts last night may not have survived but for the quick actions of fellow pub-goers…
(Updated at 7:55 a.m.) Ireland’s Four Courts in Courthouse caught fire after a car barreled into it at the height of dinnertime Friday. The fire is now out after a…
After a steamy stretch, Mother Nature is rewarding us with a pair of new-perfect days. We hope you are able to get out there and enjoy the weather tonight and…
The adorable Kimchi, a black and white Guinea Pig is the newest Adoptable Pet of the Week.
Do you struggle with anxiety, depression, stress, grief, trauma or anger? Are
you ready to make a change?
Lauren K. Nickum, LCSW, CSAC from Peaceful Mind Solutions is now taking new
clients for psychotherapy. Lauren has over 10 years of experience treating
mental health disorders and general life stress in adults and adolescents. For
more information visit
Signature Theatre just released single tickets for all 33rd season productions, which highlights the organization’s long-time relationship with legendary composer Stephen Sondheim. Beginning with the musical adaptation of The Color Purple and irreverent No Place to Go, the season continues with three Sondheim musicals, the DC premieres of Off-Broadway hit Which Way to the Stage and Pulitzer Prize finalist Selling Kabul, the Tony Award®-winning rock musical Passing Strange, and return of Signature’s cabaret series honoring legendary artists.
“Last November, the world lost an icon. The death of Stephen Sondheim was a blow to everyone in the theater community. Signature Theatre would not be the same without Sondheim — he IS Signature’s ‘signature.’ This season, we are honoring the legend with productions of Into the Woods, Pacific Overtures and Sweeney Todd dedicated to his memory. These shows represent the diversity and range of Sondheim,” said Signature’s Artistic Director Matthew Gardiner about the new season.
Join us Sunday, Aug 28 from 12-3pm for our MEGA Wine Tasting
How it Works:
We’ve invited all our wine vendors that we work with to bring 6-10 wines in their portfolio (wines that are usually not carried at Osteria