Following his election, he made some comments regarding the current global Pandemic (COVID-19). His remarks were towards reducing the negative effect of the pandemic on citizens.
Generally, the pandemic and the country's political atmosphere didn't help things. It reduced the confidence of buyers and renters in the market's future. The reason for this isn't farfetched; there was a lot of uncertainty under the former administration.
In fact, Steven Gottlieb, Warburg's Realty Agent, mentioned that regardless of the mass' stand with the last administration -for or against, there was little to no stability on anything either way. He also said that despite the many secretaries and other bodies of authority (such as nominees and appointees), there was still instability. A tax bill was floating halfway through the government, and it affected a lot of people - some more different from others- on a deduction basis.
Real Estate workers are generally eager to see a change. Especially in the way policies of tax and funding would be handled. These, among others, are positive impacts of Biden's presidency on the US real estate market. The new administration is a new look in the country, and it would improve the real estate market in the following ways:
One of Biden's plans after his win is to offer a large sum of money (about a hundred billion dollars) to a Fund called the Affordable Housing Fund. This Fund is to increase low-income housing so that communities and people who struggle with affordability can still purchase houses.
This plan seems to be a consolation for the underprivileged. However, the founder and CEO of Okada & Company, Chris Okada, proposes that there might be a need to inject another large sum of money in the future to sustain this development in big cities. In his words, the development is "cost prohibitive" due to the high cost of land purchase, construction, and maintenance of assets.
However, Biden's Housing Fund would help the real estate market as there would be an increase in the number of people who can procure a housing facility.
As much as this is supposed to be the norm, Trump's administration refused to provide funding for major cities of the United States, especially during the heating season of the pandemic. On the other hand, the New York Times reported that Biden would push for a federal stimulus package worth about four trillion dollars. It is safe to say that the US is in a better position to get federal funding from Biden than with Trump.
Funding generally makes the economy go round. It facilitates stability and improves the quality of life, and when there are challenges with funding in the economy, the future of real estate also suffers it.
Biden has said that he will balance the economy by placing a tax on the high class and assist the low and middle classes. This is unlike Trump's approach; the multi-trillion tax plan for the wealthy in 2018.
Biden's flexibility and willing attitude is not only appreciated by the Democratic cities but would also boost the operations of the economy and indirectly affect (positively) the real estate market.
Another good news is that Biden is liable to eliminate the SALT cap placed by Trump. The state and local tax (SALT) deduction permit taxpayers of high-tax states to subtract local tax payments on their federal tax returns. It is known that asset taxes are higher in communities that are far from big cities.
Removal of the SALT cap would be beneficial to those who live in those suburbs - and a lot of people do. Most of these people moved into these far communities during the pandemic to reduce the chances of being infected.
The coasts are usually costlier, but this year (and due to COVID-19), the supply of stored goods has grown, therefore reducing sales. The reduction in sales has, in return, increased the success of the housing sector. More people tended to settle down to the extent that there is currently a shortage of available houses.
In addition to those above, the President-elect proposes a tax credit of about fifteen thousand dollars to people purchasing a home for the first time. This would improve the rate at which people would purchase this asset. It would also help those who struggle to buy a house for different reasons, including personal minor/major financial challenges.
Besides, this tax credit would assist even more those who want to purchase their homes outside of the big cities where taxes are higher.
Though it is understood that Biden cannot do all he wants to as he pleases unless the Senate and Congress body permits it, but all-in-all, real estate workers are positive towards Biden's administration. The people are more hopeful for stability in the market in this governance than the last.
Undeniably, the market suffered under the hands of the pandemic. However, the US economy can recover if the stability can be sustained for a relative time. And this is what seems like what Biden's administration would birth.
Gottlieb Steven believes that Biden's presidency will bring stability. On a funny note, Gottlieb Steven said regardless of each citizen of the United States' stand on Biden's election - for or against, everyone would enjoy a predictable daily life for the next four years of his administration. Biden's administration would not consist of random alterations to life activities based on social media tweets and posts sent at odd hours of the day by the president.
He also mentioned that real estate is very much dependent on the confidence of the market, i.e. the people, the buyers. When people can almost be certain that their lives are not in danger of any sort (health, political or financial), they are more likely to invest in a house.
We can then conclude that the new administration has improved the real estate market and will continue to do so over the next four years. This is because the people can almost count on Biden to make fair, democratic, and flexible decisions towards the stability and overall positive performance of the US economy.
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