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January 20, 2017 • Real Estate History

Is the Trump Rally Over? Housing Sales Plummeting as Mortgage Rates Go Up

While President-elect Donald Trump has had a long career in real estate, following in the footsteps is his father, also a real estate tycoon, becoming POTUS may not lead to the best outcome for home buyers but rather for financiers. Trump created a fortune by building or licensing his name to luxury condominiums, hotels and casinos. The middle class faces different issues.

Of these, an overarching issue is that good affordable housing simply isn’t available to much of the middle class.  There was no discussion about the supply of affordable housing during the campaign, although the growing housing crisis affects almost all segments of voters who hope to see the Trump Administration launch a new chapter in housing policy..

Trump’s blue-collar supporters from Pennsylvania, Michigan and Wisconsin may have missed the fact that the Donald focused on wealthy real estate buyers by constructing glitzy condos in city centers, not the needs of working class citizens in desperate need affordable housing. The hike in property values after the housing bust led to restrictive zoning practices and narrowed the field for affordable housing even more than before.

Trump’s properties fell from their initial glut of value increases back to par in most cities outside Manhattan. Nonetheless, other property owners, particularly in red states, still feel confident. Blue state home investors, however, are adopting a wait and see attitude. Mortgage rates continue to rise, but actual sales are falling sharply.

Trump promised dramatic new investments in infrastructure, which some have compared to shades of the Depression-era Works Progress Administration – which created a demand for housing as Golden Gate Bridge and Hoover Dam workers sought to relocate. However, there has been no concrete plan released that explains how Trump plans to keep his acceptance speech promises for rebuilding highways, bridges, tunnels, airports, schools, hospitals, and other infrastructure, nor how the working class will benefit from the jobs such a rebuilding would bring with it.

Trump and his father struggled with brand and image issues in the ‘70s, when they were sued by the U.S. Justice Department for alleged discrimination regarding apartment rentals in 40 New York based properties they owned in New York. (The suit was settled.) Today the real estate mogul has the last laugh as he prepares to take over the White House.

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