After knee-jerk panic in the global stock markets late Tuesday night — when Republican candidate Donald Trump was securing a win in the presidential election — the Dow soared 257 points on Wednesday.
A similar type of reaction may be seen in the housing market. MarketWatch spoke with experts in the housing industry, including Ralph McLaughlin, chief economist at Trulia.com. McLaughlin said that in the short term, homeowners in Democratic blue states (coastal states with large cities, for example) might be rattled by Trump’s victory. They’ll be more hesitant about the future of the economy, leading them to forego large investments, like buying a new house.
Meanwhile, homeowners in Republican red states, like those in the south and midwest, “will likely feel a surge of confidence that could bolster demand,” McLaughlin says.
The big question is how a Trump victory will affect home prices. That still remains to be seen.
“One part of the struggles of the middle class that came through in this election was that they can’t find good affordable housing,” said Kevin Finkel, executive vice president at Resource Real Estate, a Philadelphia-based real-estate investment trust (REIT) that focuses on mid-tier rental apartments in post-election commentary. “But you didn’t see any discussion about the supply of affordable housing during the campaign,” Finkel said.