Real Estate Reacts to Donald Trump Win

Real estate once again will have one of its own in the White House, but that does not mean President-elect Donald Trump will have free rein to give the industry what it wants.

Trump will need Congress to implement much of his agenda, including cutting corporate tax rates and renewing other aspects of the 2017 tax law that proved popular with real estate, such as Opportunity Zones and deductions for pass-through entities.

This wish list would likely be an easy sell with a Republican-controlled Congress. The party flipped the U.S. Senate, but control of the House remains undecided.

In the hours after Trump clinched the election, some industry players expressed hope that he will be able to push through his tax proposals and make it easier to build by cutting regulation.

“In an era when so many industries face mounting regulations, President Trump will provide a rare breath of relief for real estate developers,” said Jared Epstein, president of the developer Aurora Capital Associates. “His focus on streamlining federal regulations will allow us to bring visions to life faster and more affordably.”

Epstein believes another Trump presidency will preserve 1031 exchanges, which allow investors to defer capital gains taxes by buying similar properties to ones they have sold. The Biden administration had pitched restricting such benefits, but did not get much traction.

This summer Trump reversed his stance on the $10,000 cap on state and local tax deductions in the 2017 reform he signed, pledging on his social media platform Truth Social that he would “get SALT back, lower your Taxes, and so much more.”

The cap disproportionately affected blue states with high property and income taxes, in particular New York and California.

Jeff Gural, chair of GFP Real Estate, said he hopes Trump will stick to his pledge on SALT. Gural supported President Joe Biden’s aborted campaign but shifted his focus to congressional races, believing that a Senate controlled by Democrats — and led by Brooklyn’s Chuck Schumer — offered the best chance at doing away with the cap.

Still, Gural thinks Trump could fill his cabinet with people who share industry interests. Howard Lutnick, Newmark’s chair, is heading Trump’s transition team.

“Donald is a business person,” Gural said. “Hopefully he will surround himself with business people.”

Bess Freedman, CEO of Brown Harris Stevens, said she voted for Harris. But “forgetting the emotion of this, wearing a business hat,” she said Trump’s experience in real estate could be a positive. She echoed hopes that Trump will stand by his comments on SALT.

“I have to think something good is going to come of this,” she said.

Compass brokers Tom Postilio and Mickey Conlon also registered “two strong votes” for removal of the deduction cap, which would boost home values in high-tax areas.

Pro-housing groups had backed Vice President Kamala Harris, energized by her plan to build 3 million homes during her first term by expanding key construction tax credits and incentivizing localities to cut red tape.

Construction unions, including the Brotherhood of Carpenters and Joiners of America and the North America’s Building Trades Unions, endorsed Harris amid concerns that Trump would repeal Biden’s executive order requiring project labor agreements on federally funded, large-scale projects.

“Now is the time to take action to address the nation’s housing shortage and let builders build.”

Carl Harris, National Association of Home Builders

Trump is not known for detailed plans and has not released one on housing or set a target for home construction. He has expressed support for building on underutilized federal land and for doing away with regulations that slow down construction, but has not provided specifics.

Romeo Manzanilla, COO of Austin @properties Christie’s International Real Estate, noted that Trump has shown interest in “easing up on environmental and permitting rules,” which could promote construction of more housing and bring prices down.

Carl Harris, chair of the National Association of Home Builders, said in a statement that his organization looks forward to working with Trump and Congress to “enact a pro-housing legislative and regulatory agenda that increases the nation’s housing supply and eases the nation’s affordability woes.”

“Throughout the campaign, voters consistently pointed to the lack of housing availability and affordability as a key issue in their voting decisions,” he said. “Now is the time to take action to address the nation’s housing shortage and let builders build.”

Trump has said the influx of migrants into the U.S. has driven up housing prices and said his plan for “mass deportations” would alleviate demand. But economists have said it would have limited impact on prices because new migrants tend to pile into homes already occupied, do not buy houses and represent a tiny fraction of the population.

Experts add that deportations would deplete the construction industry’s heavily Latino labor pool, raising costs and curbing production.

Trump has also called for a 60 percent tariff on goods imported from China and 10 percent on all other imports. That would build on levies imposed on steel and aluminum, which raised average prices for the materials by 2.4 percent and 1.6 percent, respectively, according to the U.S. International Trade Commission.

“If Trump goes forth with his economic plan, which heavily relies on tariffs, that’s going to raise the price of consumer goods considerably, and when those prices go up, that goes hand in hand with increased inflation,” said Compass’ Conlon. “And if we’re back to higher inflation, guess what? We’re back to higher mortgage rates.”

The Department of Justice’s enforcement of antitrust laws could also change under Trump. In August, the agency sued RealPage, alleging its software enables landlords to collude on rent. Harris had pledged to go after corporate landlords who use algorithms and price-fixing software to inflate rents.

In May, Trump became the first former president to be convicted on felony charges. He was slated to be sentenced on 34 counts of falsifying business records later this month, but it is unclear if that will happen. The DOJ is winding down two other criminal cases against him, in line with a policy to not prosecute a sitting president, according to NBC News.

Trump has emphasized the need to bring inflation and mortgage rates down, although presidents have very limited ability to do that. John Walkup, co-founder of UrbanDigs, said heightened Treasury yields — which shot up Wednesday— could keep mortgage rates high.

“This dynamic will be especially relevant for more interest rate–sensitive sectors [such as] properties under $2 million, where financing costs are more of a factor,” Walkup said. “Price adjustments here may surface sooner. On the other hand, the luxury sector remains relatively insulated and in recovery mode.”

The Dow Jones Industrial Average jumped more than 1,500 points on Wednesday, the most in a single day since November 2022, according to CNBC. Briggs Elwell, CEO of RLTYco, a fintech commission advance startup, said the “surge in market confidence” marks a “fundamental shift in the marketplace.”

“It’s quite clear that you’re seeing all major financial markets see positivity in the election results,” he said. “Again, that doesn’t mean that socially, everything here is great, but in the real estate segment of it, it appears that the market has spoken, that they’re very confident with the decision.”