E
xecutives at housing research companies are weighing in on the potential impact of President Trump's policies on the commercial real estate market and housing market over the next four years. According to Gregg Logan, managing director of RCLCO, Trump's background in real estate and business-friendly policies suggest that his new term could introduce significant changes across both sectors.

    Logan notes that Trump's tax cuts and regulatory easing could stimulate commercial real estate, but the benefits may be temporary or offset by economic drawbacks from other policies, including rising tariffs and immigration limits. He also suggests that potential tax breaks for high-income individuals could drive demand for luxury properties, leading to higher activity in exclusive markets.

    However, Logan warns that proposed tariffs on imports, particularly a 60 percent tariff on Chinese goods, could increase construction costs, driving up prices on housing and commercial projects. This could lead to rising inflation, material costs, and mortgage rates, making homeownership more challenging for middle- and lower-income buyers.

    Logan also cites the potential impact of stricter immigration policies on real estate, including reduced labor pools for construction and decreased demand for rental housing in urban areas. He notes that the U.S. economy remains the primary driver of real estate demand, but Trump's proposed economic policies could have a broad impact on the market.

    Rich Palacios Jr., director of research and managing principal at John Burns Research and Consulting, agrees that presidential policies can greatly influence housing for years to come. He estimates that the U.S. is undersupplied with housing and needs 1.5 million additional vacant units to return to balance.

    Palacios suggests that expanding home construction on federal land could increase housing supply and affordability, but may face regulatory, environmental, and infrastructure challenges. He also notes that tariffs may increase inflation by raising the prices of imported goods, leading to higher costs for consumers and businesses.

    In addition, Palacios cites the potential end to SALT, the state and local tax cap currently limited to $10,000, which could benefit high-priced markets most by allowing residents to deduct more of their state and local taxes. He also notes that reducing regulations during the Trump Administration could lower construction costs and increase supply quicker but may raise environmental and quality concerns.

    Overall, both Logan and Palacios emphasize the need for adaptability in the real estate market as a result of Trump's proposed policies, which could have significant impacts on commercial real estate development, housing affordability, and labor markets.