How Will Joe Biden as US President Affect Real Estate

Buying & Selling Real Estate
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How Will Joe Biden as US President Affect Real Estate

Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

I will like to know how you guys think his administration will affect Real Estate and Investors. 

I have listened to diverse opinion on this from folks that are not investing in Real Estate but I will like to hear from Investors and Real Estate Professionals.

As a Real Estate Agent and Investor from Houston Texas, I have received calls from clients seating on the fence to see who win the election. 

How will this affect the General Buying and Selling of Real Estate?

Do you think Joe Bidden will save foreclosures in 2021?

Do you see any big changes in the next few months?
Should New and Experience Investors buy if the number works of wait for few months to see how his policies will affect Real Estate?

Please support your opinion with facts if possible. Appreciate your meaningful contributions.

Thank you 

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
5y

Focus on deal flow and your criteria.  Everything else is noise.

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  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    5y

    National Real Estate Investor put out a great analysis of the major changes real estate may see under a Biden administration.  I suggest checking that out!

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Brett Tvenge:
    Originally posted by @Account Closed:

    The administration's affect on real estate will depend the unemployment rate and businesses shutting their doors due to COVID. I personally don't see much of a price decrease for homes in 2021. It takes a LONG time for homes to decrease in value. Its not a stock. Look at 2008-2015. Housing market started massive foreclosures in 2007 but the housing market didn't hit rock bottom prices unit 2015 in most areas.

    That might be for your market, but extremely false in the Phoenix Market. Home prices plunged immediately.

    YUP those numbers are off for 90% of the markets in the US..  by 2015 many had recovered quite well

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  • Sam Lewis
    Real Estate Agent · Baltimore, MD · Member since 2018 · 285 posts · 228 votes
    5y
    Originally posted by @Wale Lawal:

    @Sarah Kartsher

    COVID is a big factor. We hope the vaccine will be readily available for all by mid 2021.

    This I believe should mitigate the continuous impact on the economy.

    Vaccine or no vaccine it doesn't matter can't you see this is part of the script? For the record this vaccine will not be entering my bloodstream.

    As a buy and hold investor, let's focus on what we can control - deal flow, expenses, tenant placement, and local market analysis. 

    To be quite honest even in a worst case scenario, I haven't even planned on using a 1031 exchange. Who knows maybe in 10 years if it still exists, but at this rate I could keep acquiring smaller single unit rentals with little no issues on growth and cash flow. 

    8Reply
  • Sean T.
    Rental Property Investor · MA · Member since 2014 · 420 posts · 213 votes
    5y

    After posting my previous response on here I wanted to add this.

    I just took the time to look at the proposed 1031 change.  This would only apply to individuals with income over $400K.   know, I know, everyone sees themselves getting there but the reality is that many/most will not.  I say, hustle like crazy and deal with it when you have the money to really find a way to make it work!

    Keep that in mind before anyone panics!  

    8Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    5y

    Real Estate is dominated by Fannie Mae for residential properties. If any government takes that out of the equation or reduces it that is a major event. As far as I know low interest rates and government subsidies to homeowners is a staple feature of both parties. 

    Other minor changes in tax policy will not move the market in any direction. Serious economic disruption due to Covid is likely in either case. The US has given up and failed entirely in managing the virus. That may actually be a plus for real estate as there is no appetite amongst Americans for serious shut downs of the economy. People may die but markets must thrive. Other possibilities include expansion of Section 8 (good for REI), extensions of eviction moratoriums (bad for REI), and tax changes (probably slightly bad for profits but not market moving).

    Ive also seen some reports that say delinquent mortgages are at a very high level. Once foreclosures are allowed some markets will probably see the effect. 

    5Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    5y

    As I understand the Biden proposal, the $400,000 income limit INCLUDES the income generated from the 1031 transaction itself.  That's a rounding error in any significant commercial real estate deal anywhere in the U.S. and in any substantial residential deal in SF, LA, San Diego, DC, NY, Seattle, Boston, Miami, Chicago, etc.

    5Reply
  • Nicholas King
    Member since 2020 · 2 posts · 2 votes
    5y

    @Wale Lawal If you don't believe this then you haven't been paying attention.

    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    5y

    Something we haven't mentioned yet: I think the genie is out of the bottle now on rental property restrictions. This is not so much a function of Biden as it is of COVID-19. I expect one of the first things Biden will do is encourage much longer-term, much more vague moratoriums on evictions "for the duration of the pandemic" to be put in place.

    Especially in the blue states, expect measures designed as preferential treatment for poor black folks as a quid pro quo for what Biden obviously understands and mentioned was their role in winning him this election. In real terms, I think this is going to mean a much more favorable response for rent control in D-class areas. Biden over time has a clear record of belonging to the school of "throw enough money at the problem and it will go away." What is pretty clear to us here at BP in our collective experience regardless of our political affiliations is that rent control just changes housing problems, it doesn't really solve them in D-class neighborhoods.

    I believe this is really going to be evident in Georgia, North Carolina, and here in Pennsylvania. Any Democrat in the Atlanta area looking to curry favor with Biden just has to do something that sounds nice for black folks and he'll have the President's approval or that of those close to him.

    All in all, it would be nice if some of these measures I'm talking about had the desired long-term effects. I just don't think they will, but they will be a real, tangible burden for us. The Democratic party has evinced almost no new ideas for dealing effectively with generational poverty and slums, especially of the racial variety. Neither does the Republican party.

    Minimum wage is going up. The country has passed the point of no return on that. At this point, I'm sure the people coming in are looking at it as an easy way to inflate the currency 50-100% to erase some of the massive national debt, and pretend it isn't happening. So of course, people, I think the wise idea is to borrow a lot of money and spend it on real estate NOW before the inflationary events get started. There's no way out. The money's going to be worth less.

    9Reply
  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    5y

    Hopefully  markets will stabilize, covid gets under control, which will help the lenders feel more at ease and just maybe they will no longer require such hefty sums for reserves.   I hope so as I have a large chunk sitting in reserves that i wont get back for 16 months or they decide there is less risk in the markets! 

    1Reply
  • Steve K.
    Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    5y

    Biden released his housing policy in this paper last February. https://joebiden.com/housing/#... primary goals of the Biden housing plan are stated to be:

     1) Addressing the issue of affordable housing and homelessness. 

    2) Increasing supply, lowering cost, improving quality of new housing through investments in new construction technology and energy efficiency.

    3) Ending redlining and other discriminatory practices in the housing industry.

    The most significant specific legislative changes he is planning are:

    1) A $15,000 first-time homebuyer tax credit that is advance-able (so it helps with the down payment), not like a normal tax credit that you get the next year.  

    2) A new renter's tax credit. 

    3) New money for old Section 8 subsidized housing voucher program and other existing federal rental assistance programs.

    4) Single-Family Zoning changes/legislation similar to the proposed HOME Act of 2019 to loosen up zoning restrictions and allow for more urban density. 

    5) Creation of a public credit reporting agency.

      He does not mention getting rid of 1031 exchanges in his housing plan, but I believe the idea has been brought up in relation to his tax plan (which would only affect those with annual income $400k+). 

      In my Chrystal ball, the end result of these programs will be:

      1) Increased section 8 spending will increase rents in areas with lots of section 8 vouchers.

      2)Single family zoning will be too contentious of an issue and won't go anywhere.

      3)The new down payment tax credit will lead to a 20-30% increase in property values over the first few years (which could then possibly correct if the credit is not continued). We saw this exact scenario play out in 2008-2010 when there was a similar $8k tax credit for new homebuyers. Values increased 20% but then backed off a little when the credit expired in 2010. 

        10Reply
      • Ronald P.
        Realtor · Detroit, MI · Member since 2019 · 39 posts · 9 votes
        5y

        @Wale Lawal His tax plan will eliminate the 1031 exchange, at least thats what people are predicting. The IRS will probably have new rules for it.

        0Reply
      • Joe Bertolino
        Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
        5y
        Originally posted by @Derrick Dill:

        Will most likely bring back state and local tax deductions (SALT, property tax deductions) that were taken away

         As a Californian bringing back Salt and property tax deductions and the likelihood that he pushes through a huge stimulus package makes me feel a little better. 

        2Reply
      • Rik HunterBusiness Member
        Real Estate Agent · Chattanooga, TN · Member since 2020 · 107 posts · 62 votes
        5y

        Biden's economic plan includes a $15,000 first-time homebuyer tax credit. https://www.taxpolicycenter.or...

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        0Reply
      • Erik B.
        Rental Property Investor · Amityville, NY · Member since 2018 · 351 posts · 441 votes
        5y
        Originally posted by @Account Closed:

        Real

        The US has given up and failed entirely in managing the virus. That may actually be a plus for real estate as there is no appetite amongst Americans for serious shut downs of the economy. People may die but markets must thrive. Other possibilities include expansion of Section 8 (good for REI), extensions of eviction moratoriums (bad for REI), and tax changes (probably slightly bad for profits but not market moving).

        Are you stating a fact or your opinion? Where does it show that US has given up? We are testing millions of people, some over and over again and the amount of deaths (or death rate) has decreased due to better therapeutics and experience over 9 months. 

            Hell the US is trying so hard we've managed to rid the country of the flu for the first time in decades.

        3Reply
      • John PowellPro Member
        Real Estate Agent · Kennesaw, GA · Member since 2015 · 308 posts · 153 votes
        5y

        @Sean T. I would venture to say the majority of 1031 exchanges are done by individuals marking over $400k. And if printing lots of government stimulus is the plan then $400k comes a lot quicker in a few years than it does when the limits are put in place due to inflation.

        0Reply
      • Andrew SyriosPro Member
        Moderator
        Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
        5y

        Probably not a lot. It's possible he'll go after 1031 exchanges and maybe (although I highly doubt it) the mortgage interest deduction. But likely, the only major change will be a slightly higher capital gains tax.

        On the plus side, Biden being in office will take the wind out of the far Left I suspect, which will mean less crazy local ordinances banning evictions, wildly restricting tenants screening, etc. (At least, I hope so.)

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        4Reply
      • Ian WalshBusiness Member
        Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
        5y

        Who knows. There will be deals.  That much I do know.

        2Reply
      • Bob Okenwa
        Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
        5y

        There are deals to be had in every market, in every market cycle, and under every president. Please don't let politics affect reasoning. Make smart decisions and buy right and you should be okay regardless of who resides at 1600 W Pennsylvania Ave.

        12Reply
      • David M Trapani
        Rental Property Investor · Franklin, TN · Member since 2019 · 160 posts · 125 votes
        5y

        Brock, do you have a link Or webpage for that National Real Estate Investor article?


        Can’t seem to pop it up on the web.

        Sounds like an interesting read...


        Thanks!

        0Reply
      • Greg ParkerBusiness Member
        Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 669 posts · 536 votes
        5y

        The bottom line is, everyone needs a place to live.  We as investors will profit by providing that.

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      • Wale LawalBusiness Member
        OP
        Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
        5y
        Originally posted by @Greg Parker:

        The bottom line is, everyone needs a place to live.  We as investors will profit by providing that.

         Yes, that is the mindset we all need to have. Everyone need a roof over their head regardless.

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      • Joe SplitrockPro Member
        Moderator
        Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
        5y
        Originally posted by @Sean T.:

        After posting my previous response on here I wanted to add this.

        I just took the time to look at the proposed 1031 change.  This would only apply to individuals with income over $400K.   know, I know, everyone sees themselves getting there but the reality is that many/most will not.  I say, hustle like crazy and deal with it when you have the money to really find a way to make it work!

        Keep that in mind before anyone panics!  

         Think about it logically. The 1031 is an exchange to larger properties. If you take away the benefit for people with larger properties to do an exchange, it ripples down to smaller properties. The person with a 60 unit chooses not to sell, so the person with a 10 unit has no properties to buy. The person with 10 unit properties holds, so the investor with duplex and quads has nobody to buy from. 

        Personally I think there are far worse things in the Biden tax plan than this. The corporate tax increase will affect most every American. Everyone in this country either works at corporations, buys from corporations or invests in corporations through their retirement accounts. If a corporation is faced with tax increases they have three options:

        1. Take lower margin, which affects company value, stock price. 

        2. Increase prices, which affects consumers.

        3. Decrease expenses, which the number one expense for companies is employees, which means layoffs.

        15Reply
      • Darius Ogloza
        Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
        5y

        The real opportunity for investors in the plan may come through the proposal to increase density by restricting local governments' ability to exclude multi-family through zoning laws. You are already seeing variations of this on the West Coast through liberalized rules for building ADU's on properties otherwise zoned for single family. Local governments are likely to resist but a reckoning of some kind seems to be in the cards.

        3Reply
      • Steve Morris
        Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
        5y

        "The real opportunity for investors in the plan may come through the proposal to increase density by restricting local governments' ability to exclude multi-family through zoning laws."

        Got that in OR.  All the old money (ie nice neighborhoods) just hate it.

        In my own neighborhood (I live there so it can't be that nice), I'm usually the lone advocate for why I think it's a good idea.

        3Reply
      • Henry Lazerow
        Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
        5y

        More printing of money = inflation/increase value of property and increase average rents. Some say higher taxes but I doubt much of that even passes in IL we shot down the "fair tax" pretty quick. Thankfully we have a two party system that balances itself out and the president does not solely call the shots. 

        3Reply
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