All Forum Posts by: Bruce Woodruff

I know that anytime Trump's name is mentioned, someone gets triggered. Either the post is too anti-Trump, or too Pro-Trump. 

Let me be clear - I do not condemn Trump's policies or necessarily know whether they will be positive in the long-term future or not for real estate investors. Further, "Downward Pressure" may be "bad" for investors, but it may also be "good" for renters - his policies, if I am correct, may negatively impact housing prices and rents, to the detriment of investors and to the benefit of renters, in the near-term. 

"Positive" or "Negative" impacts are relative. I write from the standpoint of a real estate investor, and I perceive Trump's actions to be threatening to near-term real estate investment returns, on the whole. I believe this because I think that on the whole, his first two weeks of actions are likely to: 

- Have zero no impact on near-term supply (deliveries for single family and multifamily homes 2025 are a result of actions put into motion several years ago)

- Put upward pressure on interest rates: Trump's demand that the Fed lower rates will have absolutely no effect, other than providing a cheap source of easy social media clicks and engagement for real estate pundits. However, the implementation of tariffs, or just the threat of tariffs, is likely to influence rates, by impacting inflation numbers, and this influence may come quickly if prices for many common goods and services and raw materials rise in anticipation of tariffs, or in response to their implementation. 

- Put downward pressure on demand: I personally believe it is unlikely that Trump actually deports millions of illegal immigrants who have settled in the United States. This, to me, seems impractical, and a PR nightmare. It's possible he carries it out, but I believe it unlikely. I believe it is far more likely, however, that the effect of his stance and actions materially lessens the flow of new illegal immigrants. This will slow new demand for rentals. In the event that any meaningful percentage of 10-15 million (estimates seem to vary widely depending on which news source you prefer) current illegal immigrants are deported, real estate investors will have a big problem as vacancies soar. It is likely that a huge percentage of that 10M-15M illegal immigrant population are renters. Regardless of whether investors currently rent to illegal immigrants, their competition in the market likely does.

- Put Upward pressure on real estate operating costs: Increased costs for raw materials and supplies, and the likely increased costs for labor involved in many real estate related CapEx and maintenance projects signal the risk of increase in costs for real estate operators.

If there is no impact on near-term supply, a modest slowing of inbound (illegal) migration, more reason to believe that the cost of many goods and services will increase, and real reason to believe that inflation triggered by something other than an increase in the money supply (namely the cost of specific goods and services that are NOT housing going up, which comprise the CPI) will force the Fed to raise rates, this, on the whole, is not good for real estate investment returns. 

No, I do not think that there will be a housing crash or a massive drop, nationwide, in rents and prices. Yes, there will be offsets (do Tariffs and slowing illegal immigration increase wages for some workers - likely yes). But, I believe that the actions of the first two weeks should give investors, on the whole, reason to incrementally revise down their expectations for growth in prices or rent growth in 2025. There may also be incrementally better probability of deals, as investors who are dependent on rates coming down may find their hopes disappointed. 

I think 2025 will be, by and large a buyer's market, and that the new administration's policies only, and again incrementally, make me more confident that this will be the case.

What do other investors think? Do you agree or disagree? 

Quote from @V.G Jason:

Quote from @John Clark:

Quote from @V.G Jason:

Quote from @James Hamling:

Quote from @Paul Azad:

Trump announced last night he is canceling/caving on the tariffs to China on 20 major products. Kind of everything that's expensive that we need, like smartphones to computers, to servers, to microchips, etc. This should cause the stock market ie MAG-7 to rise over the next week, SP500/QQQ Futures are already up two to 3 percent. And it should stop the margin calls, which were triggering the bond sales on the long bonds, causing the 10 year and 30 year to rise this past week as well as any repatriation of funds to Europe to buy German Bunds if European Money thinks Trump is less erratic.

So our long bond Yields should start falling soon, and CPI printed 2.4% on Thursday so this should help 10/30 yr yields come down too. 

Hoping Larry Fink, CEO Blackrock, is wrong when he just said we are already in a recession. 

As an active trader, this is all but zero impact on mag-7 or market itself. We have a global tariff war that kicked off, and got put on hold. Hold is not done. So we exist in uncertainty. 

The market does not like uncertainty. It prices for downside risk in such. 

Honestly the market should be 20% lower right now, it's literally being held up by retail. I see it every day in trading data, that is legit that it's retail holding things up. Funds are still actively selling off too retail. 

We have 3 major things going on hitting the market; Tariff situation, inflation concerns, recession/stagflation concerns. 

There will not be any sustained "recovery" and ride up until these 3 are resolved. 

And now we have indicators of a 4th issue arising in bond side of things. Nothing is known as of yet other than there is some wonky stuff that started and if continues, that's gonna be an issue. 

 The biggest concern is corporate debt and how to refinance government debt. Basically, the bond market at this point.

You want to be in front of the CDS trade, and ideally should've been in November. 

For the others that aren't aware--the problem the Trump administration is from the Biden administration. Not to get political as I'm not fan of our orange man, but explaining the origins.

Yellen did short term re-financing which kept earnings and revenues going strong, in turn leading to a higher equities market which is where we are starting from. Bloated equity market.

Scott Bessent needs to essentially re-finance $7 trillion here by end of year(20% of our debt), which Yellen forgot to do in 2020-2021 when rates were rock bottom low. It's basically complete incompetence at the CFO level. He's inherited an awful problem.

Retail bought the dip, there's more to come. No saying how much dry powder there is. If you're retail, you don't know when the bottom is in so you actually should buying on 2nd & 3rd leg of rally. Just some advice for readers, don't buy the falling knife. You will have a lower DCA & your concentration is better. I buy dips as a hedge.

Completely different set up; I hope I'm wrong. 

International markets will have to cave, corporate debt that essentially leveraged in 2020-2022 like a DSCR to make it simpler for RE folks are coming home due(5-7 year terms). This is with higher rates & lower revenue, what does lead to? The obvious.

CDS are screaming, up 9x since election.  And like I said with instruments before to @Ken M.    CDS in 2025, like MBS in 2008, won't cause the collapse they're just an instrument to trade.

FYI, a lot of people wanted to refinance into long term debt, but Wall Street wanted a mix of things. Also, politicians were of two minds on the matter: Yes, we save money, but Wall Street short term paper reins in the “other guy’s” plans, whether D or R.

Treasury’s refinancing problems is only and solely a result of the market factoring in Trump’s tax cuts and spending increases. Announce no tax cuts, and the problem goes away. 

So no, you can’t just wave your hands and say this is on Yellen. The yields operate prospectively, and they’re pricing in Trump’s policy, not Biden’s

That's an egregious take. That's stating that the outputs of Trump's administration is independent of Biden's administration inputs.

Yet the former point stands. If Yellen re-financed, we wouldn't be in this situation.

But the re-financing issue is solely on Trump...

Make that make sense.

"That's an egregious take. That's stating that the outputs of Trump's administration is independent of Biden's administration inputs."
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No, not entirely. The material outputs of Trump are tariffs and tax cut extensions. Those are in fact independent of Biden's inputs. The markets are reacting to Trump policies, not Biden policies. Biden's policies were already priced in well before Trump's inauguration in January. Inflation was falling under Biden, remember?

As for had Yellen refinanced, you ignore my point: She faced constraints both from Wall Street, and from the political parties, because the shorter term instruments give an early warning of what various policies will do. I absolutely agree, however, that we would have saved money. Too bad neither the Ds nor the Rs wanted to do that, for partisan reasons. So just as Republicans leave bad situations to Democrats to solve (e.g., exiting Afghanistan after Trump's surrender treaty), Democrats leave bad situations to Republicans to solve (refinancing debt in the face of tariffs and tax cut extensions, for instance).

With respect to the math being built into bond prices post-election because Trump had said he was imposing tariffs, you neglect the fact that nobody expected Trump to impose tariffs at the levels he did. They certainly did not expect tariffs to be imposed according to some inane formula totally unrelated to the terms of trade. Who knew that penguins were outsmarting us?