How the 2024 Election Could Impact the Real Estate Market

As the 2024 election conclude, many are watching closely to see how political shifts could influence the real estate market. Historically, election years bring both optimism and uncertainty to the housing sector, with potential changes in interest rates, housing policy, tax regulations, and investment dynamics all on the table. This year is no different, and both buyers and sellers are looking at potential impacts that could shape the industry for years to come.

1. Interest Rates: What’s Next?

Interest rates are top of mind for real estate investors. Over the past two years, the Federal Reserve has increased rates to curb inflation, impacting mortgage rates and housing affordability. The election could introduce new policies affecting the Fed’s approach to rate adjustments, which may either stabilize or further increase borrowing costs. Buyers may see a shift in mortgage rates—either opening the door for more affordable financing or reinforcing the high-rate environment we’ve seen recently.

2. Housing Policy and Affordability

Housing affordability has become a key focus in this election cycle, as prices have climbed sharply in recent years. Additionally, policies around zoning and rent control failed in many states most notably California which is notorious for out of control rents as well as government regulated rent control. These decisions could impact affordability, availability, and the general cost of housing nationwide, influencing where and how people buy or rent.

3. Tax Implications for Real Estate Investors

Tax policy is another key area that could see significant shifts post-election. Current discussions include potential changes to capital gains tax rates, depreciation benefits, and other real estate tax incentives. Investors may need to pay close attention, as these changes could impact profitability, especially in the rental and commercial property sectors. For instance, increased capital gains taxes could discourage investors from selling properties, while alterations in depreciation rules might affect long-term holding strategies. Any changes to tax policy could also shift the appeal of certain markets and property types, impacting the larger investment landscape.

4. Environmental and Energy Policies

Climate change and sustainability have also become pivotal issues in the 2024 election. Policies around green building standards, energy efficiency incentives, and disaster preparedness are increasingly being discussed. Stricter building regulations, grants for sustainable development, and tax credits for energy-efficient upgrades could become prominent, depending on the election’s outcome. In high-risk areas for natural disasters, climate-related policy changes may also lead to new insurance regulations and building requirements. Buyers and investors will want to consider how potential environmental policies could influence property values and operational costs in various regions.

5. Investor Sentiment and Market Stability

Finally, investor sentiment often sees shifts in the lead-up to and aftermath of an election. While some investors may hesitate, waiting for policy changes before making moves, others might look to leverage uncertainty to find deals. The current political climate could lead to short-term volatility as investors assess potential outcomes and adjust their strategies. A more regulated market could make certain assets more stable, while policy changes focused on deregulation could drive new investment opportunities. In either case, election results may set the tone for the next wave of real estate investments and market trends.

What Should Buyers and Sellers Do Now?

Given the potential impacts of the 2024 election on the real estate market, here are some strategies to consider:

• Stay Informed: Keep an eye on candidates’ stances on real estate-related issues, such as interest rates, taxes, and housing policy.

• Evaluate Financing Options: If mortgage rates are a key concern, consider locking in rates sooner rather than later, or explore alternative financing options that might offer more stability.

• Assess Investment Portfolios: Investors should evaluate their holdings with potential policy changes in mind, especially regarding tax implications and market stability.

• Prepare for Regulatory Changes: Both buyers and investors should be ready to adapt to changes in building codes, zoning laws, and environmental regulations.

Remember, regardless of who is president, investors are always buying and there is always a good dealt to be found.
Make sure each deal meets your criteria and make a move. DIY Real estate tools are available to make sure that you make the most out of your investment.