After the U.S. elections, it’s time to ask the next big question – what will happen to the U.S. economy? It’s hard to tell what the new year might hold for the economy but as far as real estate is concerned, here are five trends that could make an impact in 2017.
1. Interest rates
It was recently announced by the Federal Reserve that the interest rates will increase by a quarter of a percentage point. Some analysts have predicted that a growth based on economic stimulus could lead to inflation and an even higher interest rate. It can easily make real estate properties less affordable but with the economy likely to grow this could change for the good.
2. Non-bank lending
Non-bank lending has decreased this year but in 2017 it might pick up the pace again. With Trump in charge, non-bank lending might become a good option for real estate buyers and owners.
3. Financial legislation
Donald Trump has already shown a hatred towards the Dodd-Frank Act and plans to dismantle it as soon as possible. It might not be possible to remove the entire Act as it is, but even reduced regulation will be good for financial institutions. But overly relaxed standards might also result in financial crisis and that will be a disaster for the economy and take us back to 2008.
4. Foreign investment
Foreign investments don’t look good in the coming year, but it’s better to keep an open mind and not jump to any conclusions. China has already indicated that Chinese real estate investments in the U.S. are gradually slowing down and 2017 probably won’t be a good year either, especially with all the trouble he's caused with China before ever taking office.
5. White House and Wall Street
As far as the White House is concerned, real estate and financial industries seem to be well represented by two influential people who are now part of Trump’s cabinet. Wall Street is buzzing with excitement because the big players of Wall Street know Trump’s victory will be advantageous to them and terrible for the rest of us.
At present, it’s very hard to tell how the real estate market will do under Trump’s leadership. I'm worried we will have another recession, worse than 2008 under this very unprepared POTUS. Trump, being a real estate developer, should favor the market but many feel it is a misleading idea. His initial plans don't include anything favorable for the real estate industry, but in 2017 that could change. We will have to wait and see what 2017 brings.
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