Epic Real Estate Investing - How Trump is Planning to Shock the Real Estate Market in 2025 | 1386

Episode Date: November 17, 2024

In this episode, we dive deep into the current turbulence of the housing market, which is facing unprecedented challenges due to the intersection of Trump’s economic policies and the Federal Reserve’s ongoing rate cuts. As the market teeters on a breaking point, we analyze how aggressive tax cuts, trade tariffs, and other fiscal moves from Trump’s administration are amplifying risks and creating uncertainty for homeowners, investors, and developers alike. We also examine the potential for these policies to undermine the Fed’s inflation control efforts, sparking a volatile cycle that could have serious consequences for the real estate sector. Key segments of the episode will explore the mounting inflationary pressures that are making it harder for average Americans to afford homes, as well as the delicate balancing act the Federal Reserve faces between stimulating growth and curbing rising prices. With the housing market already fragile, we’ll discuss how these dynamics could exacerbate existing challenges and reshape the landscape for years to come. For those looking to navigate this uncertain terrain, we offer strategic advice on how prospective home buyers and real estate investors can adapt to the shifting market. Should you buy now, or wait? How can you maximize your chances of success in a potentially volatile real estate environment? We’ll outline steps like securing financing early, focusing on high-growth states, and acting quickly before the market becomes oversaturated. With so many moving parts, this is an episode you won’t want to miss if you're looking to stay ahead of the curve and make smart moves in an increasingly unpredictable housing market. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. Hey, strap in. It's time for the epic real estate investing show. We'll be your guides as we navigate the housing market, the landscape of creative financing strategies, and everything you need to swap that office chair for a beach chair. If you're looking for some one-on-one help, meet us at rei-i-a-s.com. Let's go, let's go, let's go, let's go, let's go, let's go.

Let's go. This is a warning to everyone. market is at a breaking twink. Trump's aggressive tax cuts and tariffs, combined with the Federal Reserve's move to slash rate, are setting up a battle that could reshape the economy and your ability to forever afford a home. By the end of this, you'll discover one, Trump's bold plans and their hidden risks. Two, how his agenda could derail the Fed's fight against inflation.

And three, the massive impact on an already fragile housing market. Many time is of the essence. So let's dive in. President-elect Donald Trump's aggressive economic policies, tax cuts, tariffs, and increased government spending are designed to stimulate growth. But they could also pour gasoline on the fire of inflation. Here's how. First, when taxes are cut, both individuals and businesses have more money in their pockets.

Sounds great, right? But here's the issue. More disposable income often leads to more spending. If people start buying more and businesses ramp up investment, Demand for goods and services increases. Now, if the supply of those goods and services can't keep up because factories can only produce so much or supply chains are stretched, prices start to rise. That's what we call demand-driven inflation.

Second, tariffs. They are essentially taxes on imported goods. For example, if Trump imposes a 10% tariff on goods from China, that cost doesn't just disappear. It's passed down to consumers and businesses in the form of. of higher prices. This means everything, from cars to electronics to basic household items, could cost more. And as those prices rise, it ripples through the economy,

creating inflationary pressure. So why would Trump run the risk of reversing the progress that we've made on taming inflation? Well, the logic here is to exchange some short-term pain for massive long-term gain, to strengthen domestic industries leading to job creation here in the US and creating economic resilience. To make good on the promise of making America great again, there's an investment required.

Now, third, and this is where things can get tricky. You see, tax cuts, they reduce the government's income. But if spending isn't cut to match, deficits they grow. And when the government runs a deficit, it has to borrow more money to cover its expenses. Borrowing on this scale increases the national debt. And the government often finances that borrowing by issuing bonds. This could push interest rates higher in the long run. making borrowing more expensive for everyone, including homebuyers and investors.

On top of that, increased government spending, whether on infrastructure or stimulus programs, puts even more money into the economy, potentially fueling inflation even further. The bottom line on Trump's policies is that his agenda is built to drive growth, but it could also create an inflationary storm. More spending, higher prices, and bigger deficits could put pressure on the Federal Reserve to act and quickly. The question is, will these policies give the economy a much-needed boost, or will they trigger a wave of rising prices that makes everything, including housing, even less affordable? Before you can answer that question, though, you have to consider the Federal

Reserve's role. It's in a tricky position right now. You see, after years of raising interest rates to tame inflation, they're now shifting gears and starting to lower rates. Now, while this move is meant to stabilize the economy, when paired with Trump's aggressive policies, it could create unintended consequences. I mean, here are three reasons why. One, lower interest rates. You see, when the Federal Reserve cuts rates, it becomes cheaper to borrow money. This means businesses can expand more easily. People can afford bigger loans and spending across the economy, it increases. And that might sound great, but it also heats up the economy. You see, more borrowing and spending can drive up demand for goods and services, especially if paired with Trump's tax cuts.

And this could really reignite inflation. Number two, undoing progress on inflation. I mean, remember, the Fed's aggressive rate hikes over the past two years were specifically designed to slow down inflation by cooling demand. But now, with rate cuts on the table, the Fed risks undoing that progress. Lower rates combined with Trump's pro-growth agenda could flood the economy with even more money, making it harder to keep prices stable. And three, the push and furs.

pool of conflicting agendas. Trump's policies are all about growth, right? Tax cuts, tariffs, and government spending are meant to supercharge the economy, but growth policies tend to be inflationary. Meanwhile, the Federal Reserve's goal is to keep inflation under control while maintaining stable employment. So, if Trump's policies drive inflation too high, the Fed could be forced to reverse course and start raising rates again, creating market uncertainty and volatility. I mean, the big challenge here is timing. If the Fed cuts rates too aggressively, while Trump's policies are pumping more money into the economy, inflation could spiral out of control. On the other hand, if the Fed doesn't cut rates fast enough, it could slow down economic growth and make borrowing too expensive for businesses

and homebuyers. Think about your neighbor who just secured a mortgage at a low rate. What if, in a few months, the rate cuts reverse and you're left paying significantly more for the same loan. This isn't just speculation, it's a potential outcome of the current economic policies. The bottom line on the Fed's role is they are walking a tightrope between supporting growth and keeping inflation in check. Their decisions will directly impact everything from mortgage rates to home prices to overall affordability. So the question here is, can the Fed balance Trump's growth at all cost agenda with their own cautious approach? Or are we headed for a showdown that could shake the economy and the housing market to its core. And speaking of the housing market, how could these policies combined impact

the already strained market? In a recent interview, BH Group CEO Isaac Toledano expressed optimism about the U.S. real estate market following Donald Trump's election victory, stating, I think that the momentum is about to change big time. What do you think? I mean, is he right? Here's what I know. No matter which way the Trump-fed Tugawar goes, one thing is really clear. Housing right now is like, as affordable as it's ever going to be. And here's why, the supply and demand crisis. You see, the housing market has a massive supply and demand imbalance. There simply aren't enough homes to meet the demand,

and builders aren't building new houses fast enough to close the gap. With population growth and increased demand for homes and high-growth states like Texas and Florida, and stay with me, I'll give you eight more high-growth states to consider for investing, but overall, inventory remains tight. The result, home prices stay high, and competition among buyers keeps affordability out of reach for many. This is true regardless of what happens with Trump's policies or the Fed's rate cuts. Now, of the two most likely scenarios, here's what's to consider. Scenario number one, Trump and the Fed, they work together.

You see, if Trump's tax cuts, tariffs, and spending align with the Federal Reserve's easing policies without derailing inflation control, we may see a relatively stable. housing market. In this scenario, inflation remains under control, interest rates drop gradually, and then we experience moderate, steady growth in housing prices. I mean, think business as usual with no major booms or busts. Lower rates would make borrowing cheaper, but without inflation running wild, prices wouldn't spike dramatically. In builders, they might be encouraged to add supply, but the pace would still fall short of meeting demand. So if this balance can be achieved, housing affordability will remain tough, but the market won't explode. Prices will likely

increase modestly over time. Now, scenario number two, Trump and the Fed fuel a boom. So let's say Trump sticks with his aggressive agenda, pushing tax cuts, the tariffs, and increased spending, and the Fed continues to slash rates to stimulate growth. In this scenario, the housing market could take off like a skyrocket. Lower rates would flood the market with buyers who can suddenly afford larger loans. Trump's policies, while pro-business could stoke inflation, driving up the cost of materials and homes, but also creating a frenzy as people rush to buy before prices climb even higher. Billers, they won't be able to keep up with demand, exacerbating the supply crunch, and pushing home prices even higher. In this scenario, housing prices could rise sharply, making affordability

even worse for buyers who wait. And that's the big question, isn't it? Should you buy now or wait? If you wait, your best case scenario is, rates continue to drop, prices stabilize, and you get a slightly better deal in the future. Your worst case scenario for waiting is the market takes off, prices rise rapidly, and you end up paying significantly more for the same property down the road. But if you buy now, your best case scenario is, you lock in a long-term rate before the market heats up and secure a property at today's prices. If the market booms, you'll be in a great position to benefit from rising home values.

Now, your worst case scenario if you buy now is prices and rates drop slightly after you purchase. But the difference, it's unlikely to outweigh the risk of missing out entirely if prices soar. The bottom line on housing is, whether the Trump-fed policies align or collide, one thing remains clear. We're unlikely to see housing affordability improve. Supply and demand alone will keep prices elevated and any delay could mean missing out. So the smart move is to act strategically now, locking in a long-term fixed-rate loan and targeting high-growth markets before competition and prices heat up even further. And the question isn't even if the housing market will remain challenging.

It's when you'll decide to jump in and make your move. The opportunity is here. Are you ready to take it? If so, let's talk strategy. How can you prepare for what's coming? Here are three actionable steps that you can take right now to position yourself ahead of the curve. One, secure financing promptly. With the Federal Reserve signaling potential rate cuts, now is an opportune time to lock in long-term fixed rate loans. Federal Reserve

Chair Jerome Powell has indicated that the labor market is cooling and inflation is stabilizing, conditions that could make borrowing more attractive in the near future. And what would that do to prices? It'll drive them up. Number two, focus on high growth rates. States like Florida and Texas are experiencing population booms and robust job markets, making them prime areas for real estate investment. Additionally, markets such as North Carolina, Georgia, South Carolina, Tennessee, Arizona, Virginia, Colorado, and Utah offer similar growth prospects. These regions are benefiting from business-friendly policies and demographic shifts, presenting lucrative opportunities for investors. Number three, act before market saturation.

Timing here, it's essential. As economic policies evolve, the real estate market is poised for significant activity. Early investors, they can secure favorable deals and position, before increased competition drives up prices. Exploring opportunities in single-family homes, multifamily properties, or even commercial real estate now can lead to substantial long-term gains, and it most likely will. While market dynamics can be unpredictable,

taking decisive action based on current trends and data positions you to benefit from potential upswings, which is likely what we're going to see. Even if market conditions fluctuate in the short term, real estate has historically proven to be a resilient investment, always producing positive returns over time. Subscribe, like, and share. I'll see you next time.

And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you.

I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know home for us, we got the dash flow. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.