Nela Richardson, Chieif Economist for Refin, joined Redfin from Bloomberg LP, where she was a Senior Economist with Bloomberg Government. She has also held research economist positions at the Commodity Futures Trading Commission, Harvard University's Joint Center for Housing Studies and Freddie Mac. Nela leads the Redfin research team and is a frequent guest expert on housing and economic issues for local and national media
Richardson recent spoke with DS News on what she anticipates for the housing market in 2017.
With the election results in, what do you think the new administration should do with housing policy?
It's clear that they have a ground flow of support from people that have been left out particularly in middle of the country. When we talk about housing affordability, we are usually talking about superstar cities such as Seattle, San Francisco, Austin, and Dallas which are expensive markets with low supply, but we have also discussed the Rust Belt (middle of the country) where the issue isn't a housing boom in prices, but it is about job loss. There, homeownership, affordability, and the opportunity for homeownership rings just as true as the coastal regions just for different reasons. I think what the administration should do is really focus on homeownership because the people who voted didn't say housing was a big voting issue and it wasn't discussed on the campaign trail very much, but when they write out their bills every month, the rental check or mortgage check is increasingly eating more of their income especially in our cities that are in the middle of the country where wages have not risen very much.
Trump will be our first real estate mogul president and so connecting opportunity with housing is a really important thing for him to do to meet the need that has been highlighted in election results.
In comparison to what you think the administration should do with housing policy, what do you think the actual impact will look like?
I think is is really blurry right now because this is an issue where I think there would be a big gap between what a real estate mogul who was brought into presidency by a working class population would do to help housing and homeownership compared to what some in the Republican party have been advocating. The Republican stance has been to shrink Freddie Mac and Fannie Mae, to reform FHA, and to reduce the government footprint in housing. I think it is very unclear how Trump reacts to both the needs of the voters and the platform of the Republican party when it comes to housing.
How will this new administration will influence the housing market?
The impact will not be right away. The fundamentals of the housing market have not changed. We are still in the same housing market that we were last week. We have low supplies in some places, too much supply in other places with no one wanting to buy, and it is still very hard to get a mortgage for most people with less than stellar credit scores. None of this has changed and I think the market will march on unless there is big policy disruption. What we have learned is markets move really fast and policies move really slow, and I don't expect that to change anytime soon. For the rest of the year into 2017, I don't see any changes.
Now the way buyer react to the administration might change. Some homeowners particularly in luxury markets might be pausing. Luxury buyers are fickle in the first place because they don't have to buy and they don't have the same motivations as the traditional buyer. That is the market to watch to see if it will have an impact from a Trump presidency.