With Donald J. Trump sworn in as our 45th President on the steps of the Capitol Building last week, now seems as good a time as any to ruminate on the future (of the real estate market). Two indicators to closely monitor this year will be the stock market and interest rates. After taking a quick dive immediately after Trump’s victory was announced in early November, the stock market surged to finish off the year. If this trend continues, it will boost the buying power of some home buyer hopefuls, especially here in the Silicon Valley where it seems everyone over the age of 30 has a stock portfolio. Still, despite recent stock market performance, a new president and new economic policy bring with them a degree of uncertainty. For now, expectations of decreased regulation and taxes have investors feeling optimistic about the Trump presidency.
Rising interest rates could be the real story of the 2017 real estate market. The Fed finally raised rates in December for just the second time in the past decade. And just yesterday, Fed Chair Janet Yellen said she expects a few more rate hikes throughout the year. With this being said, the Fed will only continue to raise rates if they are confident in our economy, which to a certain degree will hinge upon policy pushed through in the early goings of the Trump Presidency. If rates do in fact continue to rise, the increased cost to borrow could have a stabilizing effect on home prices in 2017.
For better or worse, 2017 is sure to be a year full of surprises! Stay tuned to my monthly newsletter for updates on the mid-peninsula real estate market as the Trump presidency progresses.