2024 Election Results Will Affect The Local Real Estate Market - But How?

Now that the 2024 election is behind us, and with former President Donald Trump back in the White House, you might be wondering how this could affect the real estate market here in Los Angeles and Orange County...especially if you are thinking about buying and selling anytime soon. While the political landscape has shifted, the real question is: what does this mean for home-buyers, sellers, and investors in our area? Let’s break it down.

Housing Policy Shifts: What’s Happening on the Ground?

Under President Trump’s second term, we can expect a push for less regulation around housing development. Historically, his administration has favored deregulation, and this could mean more flexibility for developers in places like LA and Orange County. For example, fewer restrictions on building and faster approval processes could lead to more construction projects in high-demand areas. Now, let’s throw in a big local factor: Governor Gavin Newsom’s recent push to simplify building regulations for Accessory Dwelling Units (ADUs). This is something that could make a big difference in neighborhoods across LA and OC. Newsom's legislature is making it easier and faster for homeowners to build ADUs—think in-law suites, casitas, backyard cottages, and even rental units. With fewer hurdles to jump through, more people will start adding these units to their properties, which could help address the housing shortage, but at the same time, make affordability more challenging. It’s actually a win-win: homeowners can increase property value and rental income, while adding more units to the market to ease the overall demand. However, while all this new construction sounds great, there’s a bit of a balancing act. Developers and investors might focus on higher-end properties, which could push up home prices in areas like Beverly Hills or Irvine, potentially making it harder for first-time home-buyers. So, the question becomes: will we see more luxury homes, or will the new policies actually make housing more affordable in the long run?

Property Taxes and Financial Incentives: What Could Change?

On the financial side, property taxes and tax incentives could shift as well. Under Trump, we saw changes to property tax deductions with the Tax Cuts and Jobs Act, limiting how much you could deduct for state and local taxes. It’s possible we could see some of these policies stay in place or even tighten up, especially in high-tax areas like California. This means homeowners in LA and OC might still feel the pinch when it comes to property taxes, so it’s important to keep an eye on any changes. On the flip side, Trump has been known to push for incentives that could benefit real estate developers and investors. Tax breaks or cuts for real estate development could drive investment in certain sectors, which might spark a surge in new projects—especially in suburban areas where the demand for more affordable housing is high. For those looking to invest in real estate, this could create new opportunities to capitalize on.

Market Sentiment: How Will Buyers and Investors React?

When it comes to market sentiment, a lot depends on how confident people feel in the new administration. Generally, we see that when a more business-friendly president takes office, investor confidence tends to go up. If Trump’s policies continue to favor businesses and real estate investors, we could see more activity in the market as both local buyers and out-of-state investors flock to areas with high growth potential, like parts of Orange County or even up-and-coming neighborhoods in LA. For homeowners and buyers, it might be a wait-and-see situation. Some people may hesitate to make a big purchase as they wait to see how new policies unfold. But for those who are confident, especially in areas that have been experiencing growth, now could be a great time to jump in before prices get even higher.

Environmental and Local Regulations: What’s Next?

When it comes to environmental factors, Trump’s policies may loosen some of the federal environmental restrictions, but California’s state-level environmental regulations aren’t going anywhere. In fact, California has led the charge in climate action, so you’ll likely still see local rules around things like wildfire safety, energy-efficient home construction, and sustainability initiatives. As for fire-prone areas like parts of Orange County and as we see now, much of the LA Hills, local regulations may become even more important. If you're looking to buy in these areas, it’s essential to stay informed about the local fire safety and building standards that could impact property values and insurance rates. For investors, this could mean carefully weighing the risks and opportunities of properties near the wildland-urban interface.

Looking Ahead: What to Expect

In short, while the political changes at the federal level under Trump’s second term will certainly make waves, the local impact on the real estate market here in Southern California is all about how policies play out. With the potential for deregulation and easier building processes, more development could take place, particularly with the added focus on ADUs in California. At the same time, potential tax changes and shifts in market sentiment could impact both buyers and investors. For anyone in the real estate game in LA and Orange County, it’s a good idea to stay on top of these developments. Whether you’re thinking of buying, selling, or investing, understanding the impact of new policies and regulations will be key to making smart decisions in the months and years ahead.

_{To find out how these new laws affect your real estate planning, contact the author, W. Dave Osborne. W. David Osborne is a licensed broker and Realtor in CA and WA and has held managing broker licenses in 9 states as well as 5 real estate auctioneer licenses. He has sold over 7,000 homes and currently runs an independent real estate brokerage in southern California. Contact: W. David Osborne (DRE 01346546) 714-910-9820 Time4Change Real Estate}