With a presidential election at hand we took a deep dive with one of the chapters of the new 2016 Swanepoel Trends Report to examine how the following key issues will shap the new president:
- Electronic Closings of Home Buying Transactions
- National Licensure of Real Estate Professionals
- The Consumer Financial Protection Bureau
- Independent Contractor Status of Agents
Synopsis of a Democratic President
Democratic platforms have historically favored more government oversight and taxation in addition to increased funding for social programs. None of the current Democratic presidential candidates represent a strong departure from those party ideals, which could lead to more government involvement in real estate if the party holds the White House. A Democratic president could also restrict the ability of a Republican-controlled Congress to repeal or replace portions of the Dodd-Frank legislation that hampers access to consumer credit, which has dramatically affected the housing market. If Democrats retain the White House, the real estate industry will face a number of issues, including two prominent ones. First, the CFPB’s prominence will almost certainly grow, and second, SCOTUS appointees will likely be more pro-labor than pro-business. This calls into question whether or not the majority of real estate agents will continue to be classified as independent contractors should the court agree to hear one of the cases referenced above.
Synopsis of a Republican President
Look no further than the campaign finance reports to see that real estate has traditionally been a “red” industry. Although the 2008 housing bubble burst under the Obama Administration, the crisis began shortly after the turn of the century under the leadership and policies of President George W. Bush. Many industry participants fondly remember the relatively easy access to credit and the correspondingly high number of home sales they fostered in those years. While the country will most likely never return to these freewheeling policies, there is no denying that Republicans are strongly in support of reversing course on some of the strict measures that followed the enactment of the Dodd-Frank Act. Make no mistake, the CFPB and the rules that it has produced with factory-like consistency would immediately come under scrutiny should a Republican win the presidency.
What are We Doing About It?
Under the leadership of the National Association of REALTORS® (NAR), the real estate industry has long understood the importance of politics. From NAR’s lobbying arm, the REALTOR® Party, to its Political Action Committee (RPAC), the trade association is one of the most powerful political forces on Capitol Hill. Since its founding in 1969, RPAC has made many long-term investments so that policymakers keep the housing industry on their minds. NAR has spent more than $336 million to shape public policy and facilitate growth in the real estate industry, according to the center for Responsive Politics.
However, real estate is vulnerable to many outside forces and, regardless of NAR’s political influence, it is obvious that those forces have been incredibly disruptive. Reflecting on the leadership of the Obama Administration, it is not difficult to understand how the outcome of a presidential election can shape the future of a country and an industry. The current administration has been a catalyst for an extreme change in both America’s political system and its culture. Since this administration took office in 2008, we’ve seen a health care system overhaul (Obama Care), legalized gay marriage, two newly appointed Supreme Court justices, a number of government shutdowns, and countless other events that have reshaped our daily lives.
While we won’t know who will control the White House 10 months from now, the strongest candidate for each respective party will become more clear next week after Super Tuesday. Whoever wins the job—Democrat or Republican—he or she will surely have a large impact on the residential real estate industry during the critical time that the industry is re-engineering itself. The influence will thus be felt for decades to come, so make sure you pick up a copy of the 2016 Swanepoel Trends Report and get a better understanding of what’s at stake.