What does a Trump presidency mean for Las Vegas real estate?

Just days after Donald Trump was re-elected president, Las Vegas-area Realtors say they are cautiously optimistic about the impact a second term could have on the local real estate market.

Buyers and sellers are already starting to come off the bench, said Mike Roland, founder of The Roland Team.

“Many of our local residents were waiting until after the election to decide their next move, leading to a market slowdown over the past few months,” he said. “The uncertainty seemed to play a bigger role than the outcome itself. Now that there’s more clarity, we’re seeing both buyers and sellers coming back into the market, and activity is beginning to pick up again.”

Listings continue to flood the market in Southern Nevada as prices continue to climb towards a new record high and the area is coming off its worst year for sales since 2008. On top of Trump’s election is a second interest rate cut by 25 basis points and Roland said all the signs are pointing towards an economic resurgence.

“The stock and cryptocurrency markets have responded positively to Trump’s nomination, and I believe the real estate market will follow suit, especially if the interest rates come down,” he said.

Las Vegas finds itself in the middle of a housing crisis caused by multiple factors including a lack of land to develop, high interest rates, growing population, high mortgage rates and a slowdown in homebuilding. Multiple Realtors who spoke to the Las Vegas Review-Journal said Trump’s push to deregulate the housing industry and open up more federal land for development could lead to a building boom.

This will be easier said than done and proposed tariffs from Trump could hamper the market, said Nicholas Irwin, research director for UNLV’s Lied Center for Real Estate.

“If you put tariffs on a lot of goods, that could potentially make housing more expensive, and then it will be tougher to build more affordable housing. And then depending on what happens with mass deportation and those policies, a lot of illegal immigrants are working in the construction trades so if you remove even a small percentage of that labor force it could drive up wages and offer fewer workers that are available to build houses.”

Federal agencies under the spotlight

With Trump’s re-election, Forrest Barbee, Berkshire Hathaway HomeServices Nevada Properties corporate broker, said he is keeping a close eye on both the Department of Justice and the Federal Trade Commission, whose current chair is left-leaning Democrat Lina Khan.

“These agencies have made our lives very difficult and they seem to be anti-business,” he said.

Reports are the Department of Justice is paying close attention to a recent settlement the National Association of Realtors — which has approximately 1.5 million members — agreed to concerning a massive class-action lawsuit which alleged real estate agents were colluding to fix commissions for buyers and sellers. The DOJ may still pursue legal action against NAR, according to multiple reports, however Barbee said a Trump presidency may nix that.

NAR settled the lawsuit for $418 million and agreed to two big changes, one that seller’s agents could no longer advertise commission fees to buyer’s agents via the Multiple Listing Service where the majority of listings reside, and that potential buyers must sign a contract with a real estate agent upfront before they show them homes.

Barbee said the Trump administration will most likely take the heat off the industry for the time being and let the free market reign supreme.

“I don’t think we’re going to be viewed so venomously by the agencies such as the DOJ and FTC now,” he said, however Barbee added that homebuyers should not expect interest rates below 4 percent barring another economic disaster like the pandemic, and should wrap their head around mortgage interest rates settling somewhere between 5 and 6 percent.

Mortgage rate volatility

Zillow’s chief economist Kara Ng said right now it’s anyone’s guess as to where mortgage rates are going given the current market volatility.

“It’s always difficult to predict where rates are heading, and that’s even more true now,” she said. “Since the September meeting, when the Fed first cut interest rates, longer term yields, like U.S. treasuries and mortgage rates, have risen significantly. The significant spike in yields is a reflection of both a month of hotter-than-expected data, and the anticipation of potential economic policies to be put forth by a new administration.”

Zillow has the average for the 30-year-fixed rate mortgage at 6.4 percent after the bond market pushed the percentage up due to the election of Trump.

Las Vegas Realtors President Merri Perry said the organization is “optimistic” that the trends of inventory and sales rising, along with prices moving at a more “gradual pace”, and that political change should be taken with a grain of salt.

“No matter who is elected president, the local and national housing markets have proven over the years to be very resilient,” she said. “While the party that occupies the White House is important and while federal policies can certainly impact the real estate industry and the housing market, there’s more to it than that. Market forces, mortgage interest rates, local government policies and many other factors come into play.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.