“Know any brokers in Canada?”
After Donald Trump’s election victory, Leonard Steinberg’s phone kept ringing. Some callers were buyers gearing up to invest. Others had decided to pump the brakes until things settled down. The rest were looking north of the border.
“There’s so many unknowns at this point. We do know a few little tidbits, but they don’t add up to a full comprehensive picture yet,” said Steinberg, the president at Compass. “How it impacts the world, we don’t know.”
It’s a question that residential brokers across the city are mulling over. There’s no doubt election jitters slowed down deals. An internal survey at the Corcoran Group found 40 percent of brokers there had at least one client waiting until after Nov. 8 to make purchases. But with the presidency now settled, brokers told The Real Deal, they are optimistic deal flow will begin to normalize. While not everyone agrees on exactly how — and to what extent — Trump’s presidency will affect the city’s residential market, all believe the return to political certainty likely will have a positive impact.
Not everyone shares that rosy outlook. Last week, Charles Bendit, the co-CEO of Taconic Investment Partners, told a panel at a Real Estate Board of New York event that he fears foreign investors may back away from New York City and cause condo sales to “come to a screeching halt.” But Charlie Attias, a Corcoran broker who represents overseas buyers, believes those fears are unfounded. Within days of the election, he said he received calls from two international investors — one from Switzerland and one from Africa. According to Attias, both of them already own “substantial” property in the city and see the Trump presidency as a boon for the local market. “They feel that since he’s a business person and a real estate person, especially in New York City, he’s going to facilitate business, real estate investment and construction here in New York,” he said.
Trump sold himself to the American public as a shrewd businessman who will employ his entrepreneurial talents in governing. “He is, foremost, a great builder,” said Elaine Diratz, a managing director of new development at Town Residential, and former senior vice president at the Trump Organization. “Any time you have a businessman in the office, I think people will be more open to business deals.”
But some doubt if having a real estate tycoon in the role of commander-in-chief will make the slightest difference to the city’s residential market.
“I think de Blasio has more of an impact on New York real estate than Mr. Trump ever will,” said Elizabeth Stribling, the Chairman of Stribling & Associates. Stribling and her daughter, Elizabeth Ann Stribling-Kivlan, believe the industry should focus on local and state politics.
Industry players are also keeping an eye on any impact of the potential repeal of the 2010 Dodd-Frank law, as well as tax cuts and reduced banking regulations. Treasury yields have spiked since the election, pushing up mortgage rates. Economists are forecasting major changes to the country’s mortgage market under the new administration.
Still, Trump’s policies and cabinet picks remain essentially unknown, though speculation abounds. Steinberg said that even though the election has passed, there is still uncertainty affecting the market.
“The dollar [is] surging, which means you’re going to have fewer foreign buyers,” he said. “You don’t know exactly what policies will be in place related to foreign ownership and immigration, and how all of the Trump policy and rhetoric is going to resonate with foreign buyers.”
Some brokers said the presidential election was just one factor making buyers apprehensive. Brown Harris Stevens broker Kathy Sloane, who helped the Clintons buy homes in Chappaqua and Washington, D.C., found the level of hesitation this election cycle to be unprecedented. She told The Real Deal negotiations had stalled in the lead up to Nov. 8. But she said the shock Brexit vote, as well as falling currencies around the world, has made people extra fearful.
The smooth transition of power between governments is crucial, according to Sloane. “[Buyers are] are going to want to know who’s been appointed to the cabinet, who’s been appointed secretary of the treasure, who’s going to be secretary of state,” she said. “All of these roll outs of government influence people’s feeling of the country and where it’s going.”
But others think the fundamentals that affect New York City’s residential market will remain unchanged, regardless of who is in the White House. Jonathan Miller, CEO of appraisal firm Miller Samuel, said the greatest issue facing New York City Real estate is excess supply at the high end of the market, which is slowing down sales and causing landlords to offer discounts to renters at record levels. “I don’t see that inventory evaporating, so I don’t see there’s going to be much of a change from that condition,” he said.