Hello everyone and welcome to another

episode of Selling Greenville your

favorite real estate podcast here in

lovely Greenville, South Carolina I'm

your host as always Stan Mccune realtor

right here in Greenville, South Carolina

and you can find all of my contact

information in the show notes if you

need to reach out to me for any of your

local real estate needs whatsoever also

outside of Greenville as well I've

mentioned this before thb we have a

relocations department within my company

I can help you relocate anywhere in the

world so just let me know and just a

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notes for your benefit all right today

we're going to talk about some national

political Trends and how thb they might

be

influencing thb the local real estate

market here in Greenville obviously

they're going to influence all of real

estate thb but this is a Greenville

podcast so I'm going to specifically

talk about it through the Greenville

lenss but first starters it is fed week

okay and this is a very very big fed

week this week we are going to find out

what the Federal Reserve will do when it

comes to interest rates we've been

waiting for this for a very very long

time if you've been listening to the

show and thb quite frankly by the time

you listen to this most likely you will

already be able to look up what the FED

has done if you're listening to this

very early morning on the 18th maybe

they haven't made their decision yet or

haven't publicized their decision yet

they've already made it thb but they they

you know by Wednesday

afternoon the thb afternoon of September

18th you should know what the FED has

done and the question is not so much

will they lower rates I think that

pretty much everyone is under the

impression that they are going to reduce

the FED funds rate in some way thb the

question is is it going to be a 25 basis

point reduction or a 50 basis point

reduction thb to think about that in

layman's terms that's either a quarter

of a percentage u a quarter of a point

.25% or half a percent.

5% which would roughly take the FED

funds rate from around the

5.25% rate that is currently at to thb

either 5 or

4.75%

now just as a as a reminder the FED

funds rate isn't the same as mortgage

rates so don't get these two things

confused the FED funds rate is basically

the rate thb the of overnight borrowing

thb which I'm not going to get into all

the Weeds on that you guys can look that

up it's it's not the same as the

30-year fixed rate mortgage thb but it

does influence in directly mortgage

rates specifically the 30-year fixed

rate and the 15year fixed rate mortgage

actually all all mortgage rates even

variable rates and all of that are

indirectly affected by the FED funds

rate so when that number goes up

mortgage rates tend to go up and when

the FED funds rate goes down mortgage

rates generally go down down as well

it's not quite that simple but again

talking big picture without getting into

the weeds that's generally how this

works so again the question is at the

end of the day here not just how much

the FED will reduce the FED funds rate

but also how much of this is already

priced in right because we already have

Treasury and mortgage markets that are

that are already pricing in that the

Federal Reserve is going to reduce rates

so it's very possible for instance If

the Fed only reduced rates by 20 basis

points that we really won't see much of

an impact on mortgage rates if they did

a 50 basis point cut however I could see

that impacting thb mortgage rates but

also all financial markets potentially

causing even maybe recession Jitters

because typically a 50 basis point

reduction is only done by the FED when

they think that our economy is in really

bad shape okay so it's going to be

interesting to see if if they end up

going with that and taking the chance

that the messaging that comes out of

that is that our economy is in bad shape

we'll have to see like I said I'm

recording this before their decision

I'm starting to think that maybe I

should release my podcast later in the

week because there's just so many things

that happen on Wednesday and Thursday

that I can't account for you know when

I'm recording this on Monday or Tuesday

but it is what it is I'm doing the

best I can with the information that I

have when I get it but thb if you're

listening to this on or after thb the

afternoon of September 18th you can very

easily find out what the Federal Reserve

has done okay and now this brings me

to my next point which I shouldn't have

to address because this is a real estate

podcast but I feel like I do need to

address this

okay I'm you know very involved in

politics and I I don't favor one

party or the other I am kind of a part

of the thb the purple party if you want

to call it that the realtor party if you

want to call it that I'm more focused

on housing related issues than on

specific parties and what what their

platforms are and so when I talk

about politics I don't talk about it

through the lines of here's my party and

here's what they're doing and here's the

other party and here's what they're

doing no I don't I don't think about it

in that way I don't have a party for

myself personally and so I get kind

of frustrated when I see narratives out

there that aren't accurate and one of

them that I am very very sure is going

to happen

and I've already seen this brewing for

quite some time now you're going to for

sure hear a narrative from conspiracy

theoris saying that the FED is dropping

rates in order to help vice president

Kamala Harris now this is one of the

easiest to refute conspiracy theories

out there and I'm just going to briefly

address it so that we don't have any

confusion on this because I could see

people commenting on thb on YouTube and

on Facebook which by the way I love if

you guys do that but thb but I could

see people commenting oh the fed's doing

this just to just to influence our

elections okay let's just talk about

this briefly first off If the Fed wanted

to help out Harris vice president Harris

the time to do it would have been much

much earlier than September remember

anything the FED does has a lagging

effect the housing market really from my

perspective is the primary Market that

will feel an immediate effect from the

FED moving rates now

obviously there there if if there are

recession Jitters that come out of this

we'll certainly see as I've already

alluded to financial markets you could

see crypto do some wild things you could

see the stock market do some wild things

they might not respond well they may

respond well we don't know exactly how

they're going to respond certainly the

FED doesn't know they've stopped

basically modeling what's happening here

they're focusing on data which means

that they're not focusing on their

models anymore which means that they're

just guessing right now so the FED

doesn't know what they're doing

quite frankly and they don't know

exactly what the effect on the market

would be if they reduced rates a little

bit or reduce rates a lot which is kind

of the way the framing is thb with regard

to a 25 basis point reduction versus 50

but thb long story short really the

primary Market that would be really

directly impacted in in the short term

by the FED reducing its rates would be

the housing market but again we are

entering into the slow season of real

estate here in September and so again If

the Fed was looking to influence the

election and let's just let's just tease

out for a second the fed's like you know

what we want people to be able to borrow

money for cheaper so that they can

finally buy the houses that have been

unaffordable for them thb in order to

prop vice president Harris okay let's

say that the Fed was doing that they

should have done this way way earlier

okay the fact that they haven't done it

way way earlier thb is one of many

indicators they're not doing this to

help a certain person or a certain party

and again because most of the broader

economic impacts of the FED tinkering

with rates won't really be felt in the

economy for at least 3 to 6 months them

lowering rates in September won't impact

the economy enough before November to

swing the election it just won't that's

not how this

works however and I'm willing to go out

on a limb on that right if if you don't

believe me trust me it doesn't work you

won't see any major changes in the

polling data or anything like that after

the FED reduces rates

however even though the fed the the

results of what the FED does tends to

generally speaking lag so it it it

doesn't have an immediate impact the

immediate impact that thb that the fed's

actions do have is causing headlines and

as you're listening to this you can

probably easily Google the headlines to

see what you know Washington Post the

New York Times thb all of these various

Publications The Wall Street Journal

what they are saying about what the

narrative is that they're saying about

the FED reducing rates and now if you

think the headlines will help haris I'm

very skeptical about that I think you're

going to see kind of conflicting

headlines as a result of this I think

there will be kind of a mix of headlines

saying you know the FED drops rates

which will be relief for bar borrowers I

think that that is one headline you'll

see a lot along with the headlines

about how the FED is dropping rates to

avoid a recession well that one headline

is more positive towards Harris while

the other one uses the RW recession

and and uses it in a way that makes it

look like the vice president is

completely impotent against thb or

towards stopping a recession which

isn't entirely true but in the short

term it is and that's not really what

Harris wants to project right she wants

to project that she will be in control

that Biden has been in control and that

she will continue to be in control

and so when these thb rate reductions

happen with the FED I don't think that

these headlines are all going to be

inherently positive for Harris or at the

very least I don't think that there are

going to be material that Harris can use

which I'll get to here in a second so

long story short If the Fed wanted to

influence the election the easiest way

for them to do it would be to Simply say

that the battle against inflation has

been won and it will be easy sailing

from here they could just put that out

there put that messaging out there and

that would immediately be tons of

material for the Harris campaign like

just one sentence put out by fed share J

Powell would give Harris weeks of

material but guess what they have

avoided saying that this whole time and

even the past week multiple fed

Governors have made statements saying

the battle isn't over J Powell has been

super careful to not say the battle with

inflation is over extremely cautious

in his

wording and I don't see any reason to

believe that that will change on

Wednesday now there may be some

headlines that indicate that the FED

lowering rates is a sign that the

inflation fight has been won even though

the FED hasn't said it which would

obviously be a theoretical positive for

vice president Harris but in my opinion

unless the FED says it themselves I

don't think the headlines will hold much

weight because Harris can't just point

to a few headlines as proof that our

economy is heading in the right

direction why because the FED could very

easily contradict her in fact the FED

has loved doing this you know as soon as

markets start doing weird things to try

to anticipate the fed or as soon as the

media starts to speculate on the FED

they love to put out statements and say

things that then thb basically pull in

the opposite direction of What markets

and what the media are doing and so

imagine if thb Vice president Harris

started latching on to headlines saying

that the fight with inflation has been

won and then the Federal Reserve

chairman goes on stage and says yeah the

in the inflation fight has not been won

that would be a really really bad look

for her and that's not something that I

think she's willing to risk because

again the Federal Reserve has already

been doing this for thb has been

contradicting narratives for quite some

time and they've have shown thb no

indicator to me that that's going to

stop anytime soon and thb and and I don't

think that Harris is going to risk

basically getting into a war of words

with the FED because that would be a

terrible terrible look with her even

if she were in agreement with Jay Powell

she certainly is not in agreement with

all the FED Governors and presidents

and any one of them putting out

statements contradicting her would be a

really bad look so long story short If

the Fed were trying to influence the

election I'm sorry this has gone on

longer than I thought but thb but I just

feel the need to address this if they

were looking to influence the election

they would have already taken action and

they would have already pivoted in their

messaging to say that inflation has been

tamed they've not done either of those

things and so they aren't influencing

the election it's really that simple

additionally I've said this before on

here I'll mention again Fed chair J

Powell was appointed by President Trump

he was retained by President Biden but

he isn't a Biden guy by any means

nothing he has done or said since Trump

appointed him has been politicized in my

opinion and so it really in my opinion

is a baseless conspiracy that he is

trying to influence the election so just

ignore those headlines okay as I already

said I've gone on longer than I planed

to with that so let's pivot away from

the fed and let's talk about thb former

president Trump and vice president

Harris what are they proposing for real

estate and how might it impact things

let's start with former president Trump

Midway into his term as 45th president

back between 2016 and 20 Trump signed an

executive order creating a White House

Council on eliminating regulatory

barriers to affordable housing and and

so essentially the Trump Administration

flat out put the blame on the housing

shortage and on prices spiking on

burdensome regulations and remember this

was you know a lot of this happened

prior to the housing market completely

taking off until thb except for you

know some of this did go into effect or

some of this did happen more towards the

end of 2020 and and right before thb

president Trump had to vacate the White

House in 2021 but here's a statement

that was made at that time thb from the

Trump thb Administration Federal state

local and tribal governments impose a

multitude of regulatory barriers laws

regulations and administrative practices

that hinder the development of housing

these regulator regulatory barriers

increase the costs associated with

development and as a result drive down

the supply of affordable housing they're

the leading factor in the growth of

house prices across metropolitan areas

in the United States now Trump's

executive order thb cited restrictive

zoning growth and growth management

controls rent controls cbersome

building and Rehabilitation codes

excessive energy and water efficiency

mandated and undue parking requirements

as particularly

onerous what do I think about this I

think that Trump's team is one 100%

correct here there is no question the

regulatory burdens and numerous fees

that are being imposed on developers

have a major impact on housing

affordability we can see this right here

in Greenville County and in the

neighboring counties Pickens County

Lauren County Spartanburg County if

you build a development you have to pay

thousands of dollars in Impact fees

sometimes multiple impact fees then you

have tap fees you've got potentially

traffic studies you have to pay for you

have Foundation surveys you have to pay

for and that's in addition to all the

due diligence that's already been paid

for thb in order to to acquire the land

thb that the developer is going to build

on and then the costs of actually

acquiring the land itself the the the

cost the sales price of purchasing land

and then all of that is on top of all

the owner buffer zone and green space

requirements etc etc that are being

imposed right now on developers these

regulatory fees alone can easily add up

to over $100,000 of additional costs to

building that are passed directly onto a

buyer before any construction has ever

happened okay people need to understand

this these regulatory burdens are real

they are just costs that get passed on

to the end buyer they don't actually

Help Housing affordability in any way so

any County council person that tells you

that they're doing impact fees and all

these different things in order to help

housing affordability they either don't

understand basic economics or they are

lying to you

now at the end of the day president

former president Trump trying to become

the next president again Trump

there's only so much that he or any

president can do to affect this right

are they going to just swoop in and

override States and County councils thb

they can't do that for for what Trump

is proposing to actually happen they

would have to to be very creative to try

to reduce local regular atory

burdens and obviously that's outside

the scope of what a president can

normally do now they they can certainly

incentivize various ways for

municipalities to reduce these burdens

but it's unclear whether that would

really change things right do you think

County Council

thb would change their stance on

development simply because you know

maybe Greenville County would get some

some tax breaks from the federal

government or some grants from the

federal government quite frankly I don't

think that the County Council would

because a lot of these people in County

Council have run on anti-development

platforms so I'm not sure how

realistic it is that Trump could

actually fix this but he is identifying

a an actual problem and one that we face

right here in Greenville County now

another constraint that developers have

is on land land has obviously gotten to

be very expensive and this has had a

huge impact on the co cost of housing

and why housing has skyrocketed and so

another that Trump has done is he's

pledged to make federal land available

to build up to 10 futuristic Freedom

cities the size of Washington DC

complete with flying cars to speed

commuting to work here's a quote

we'll actually build new cities in our

country again these Freedom cities will

reopen the frontier reignite American

imagination to give hundreds of

thousands of young people and

hardworking families a new shot at home

ownership and in fact the American dream

that was a more recent proposal that

Trump had that was back in 2023 that

Trump mentioned that now I think opening

up federal land is a good idea as long

as that wouldn't obviously encroach on

protected Wildlife no nobody wants us to

do that as far as futuristic cities I

you know interesting idea of flying cars

and all of that but Trump hasn't really

released enough information for me to

really assess that so I'm not going

to comment on that specific proposal but

I think opening up more land is a good

idea right because I've already said all

of this land is is there's a lot of land

locked up right now with people that

don't want to sell for one reason or the

other developers are having a hard time

buying cheap land and so if you can't

buy cheap land you can't build cheap

houses it's it's really that simple

so I think that that is an interesting

proposal although I'd like to see more

information on it additionally an

argument that Trump has made is that the

housing Supply and affordability

problems will also improve once millions

of illegal immigrants are deported thb

which is a position echoed in the 2024

Republican Party

platform excuse

me this is a hot talking point among

Republicans right now but I am

personally not a fan of this sort of

rhetoric as I haven't personally seen

this to be true at all people love to

argue and and you know talk to me about

how you know well we have all this

illegal immigration in our country and

they have to live somewhere and so they

obviously must be increasing the cost of

housing well it's true that there is an

illegal immigration problem in our

country and it's true that they have to

live

somewhere and guess what I actually know

where quite a few of them live in

Greenville and I'm telling you right now

in Greenville they are not impacting the

housing market materially they buy the

worst houses out there even the ones

that flippers that professional house

flippers won't touch and they will rehab

them to house it to house family members

that's that's what's happening I'm not

seeing situations where US citizens are

getting bid by illegal immigrants in

bidding wars or or anything of that

nature I'm seeing the only times I've

seen thb immigrants that I suspected were

illegal purchase homes was when they did

so they purchased homes that nobody else

was willing to buy and they you know

they were just cheap you know like fireb

bured homes is what we're talking about

cheap fireb burned homes that then they

rehab and rent out to a relative most a

lot of these illegal immigrants aren't

buying homes they renting out homes and

again they're renting out homes

that are owned by a relative who bought

a really terrible home that nobody else

would buy so to me this whole illegal

immigration thing is just a distraction

from the real

issues that being said I I don't want

anyone to get this Twisted I am not

supporting illegal immigration okay

those coming into our country they must

follow our immigration laws so again I'm

not suggesting we shouldn't fix the

immigration problems that we have I just

don't think that these problems impact

housing affordability as much as they

impact other aspects of our economy

and of and our crime rates and things

like that in fact you could even make an

argument that the illegal immigrants who

make up a huge portion of the

construction Workforce actually make

housing cheaper since they are willing

to build houses for Less labor costs

than it would cost to pay your typical

American citizen to do the same work

again that's not me supporting illegal

immigration I'm merely pointing out that

the relationship between immigration and

housing costs is not in my opinion

nearly as clearcut as former president

Trump indicates that it is okay let's

talk about thb vice president Harris and

her proposals thb first off she proposes

home builder tax credits and down

payment assistance to firsttime home

buyers and that is really the heart of

her plan to address housing

affordability so we'll get to the

down payment assistance thb here in a

minute but let's talk about her

economic plan that she rolled out in

Raleigh North Carolina just a few weeks

ago she called for three to four million

new homes to be built over the next four

years and here's what she said here's

what her team said there's a serious

housing shortage in many places it's too

difficult to build thb she doesn't

mention the regulatory burdens quite as

explicitly As Trump but she's alluding

to it there it's too difficult to build

and it's driving up prices as president

I will work in partnership with industry

to build the housing we need both to

rent and to buy by the end of my first

term we will end America's housing

shortage by building 3 million new homes

and rentals that are affordable for the

middle class she said that exactly a

month ago today on I'm recording this

September 16th she said that on August

16th now out of everything I've seen

talked about this election cycle this

quote by vice president Harris is one of

my favorite because it shows that she

and her team understand the core issue

of housing economics and affordability

is that Supply is too low for the demand

we haven't had a voice as influential as

her bringing attention to the supply

problem in real estate

since well since the problem existed the

past 15 years I've never heard someone

with her kind of clout say something

like this Obama as President alluded

to an impending thb Supply issue but

remember that he was president when

demand was so suppressed by the the poor

economy which he had a roll in thb that

people weren't willing to hear that

there was also a supply issue now

however people are finally looking for

answers to the housing affordability

question and increasing Supply is the

simplest and best answer but we have to

ask the question how feasible is this

similar question to I asked with with

Trump with his you know wanting to ease

the regulatory burdens how feasible is

it to build three or four million homes

in the next four years unfortunately not

very feasible I've looked at the data

and for 3 to four million homes to be

built over the next few years over the

next four years development would have

to ramp up at a pace that it never has

before Builders would need to find land

they would need to find more labor thb

they would need to find thb Cheap

Building Supplies overnight and it just

doesn't work that

way now Vice President Harris seeks

to solve that problem with thb tax

credits for Builders to construct entry

level houses it's kind of similar to the

low-income housing tax credit thb which

has encouraged building rental houses

since 1986 but quite frankly everything

I've seen about these kinds of subsidies

I haven't seen that they've they've

actually reduced the cost of housing in

the past so I don't really see this

having a huge impact in the future so I

love that Harris is bringing attention

to the supply problem but I'm not sure

that she has actual thb real life

solutions for how to solve it now

interestingly she and Trump there is

overlap in the ven diagram between them

because she also advocates for building

home on Federal Land which I find very

fascinating so it seems like no matter

who we get for president this is

something that could be thb something

that we see from them we could see thb

opening up of federal land to help thb

Builders have more options for housing

affordability but the devil is in the

details and quite frankly like many of

thb vice president Harris's proposals we

don't have many details yet on what she

really means by that so stay tuned on

that now I mentioned before down

payment assistance so we need to talk

about that for a second Harris wants to

lower barriers to purchasing starter

homes by proposing a whopping

$25,000 in down payment assistance for

firsttime home buyers this is a bad

idea this is a really really bad idea so

Harris had my favorite thing out of all

of this which was focusing on Supply and

she also has my least favorite thing out

of all of these proposals in $25,000 in

down payment assistance would be great

for me as a realtor but would be really

bad for the housing market because it

would only lead to incr incr increased

prices and you know what I think that

this shows is that Harris knows that she

can't just build a bunch of Supply

overnight right so she's thinking well

I'm going to try to push for building 3

to four million homes but that's going

to take some time so we need to solve

the problem right now how do we solve it

right now we'll just throw money at the

problem give first-time home buyers

$25,000 and that's a short-term fix and

then hopefully thb construction and

development ramps up and then we have

the long-term fix in place as well thb

but unfortunately this short-term fix of

the $25,000 down payment assistance

would only break things more by just

flooding money into real estate that

would then cause more bidding wars more

price increases and more chaos I am not

a fan ever of these types of proposals

Obama did something similar he did a

firsttime thb home buyer tax credit it

injected money into real estate for a

couple of years and then as soon as that

tax credit expired real estate Rec

crashed and we don't need that sort of

thing to happen again what we need is

stability we need to find stability and

predictability that is what the market

needs that's what the market wants

that's what buyers and sellers want we

don't need all of these you know we

don't need to be thb you know going from

one stimulus High to the next right we

need to sober up as an industry and find

our footing and reach that point where

we're having you know standard

predictable appreciation standard

predictable mortgage rates standard

predictable es and flows of thb of the

economy and of real estate and

unfortunately when you come in and you

start injecting all the stimulus into

the real estate market you disrupt all

of that so I hate that proposal by

Harris and I hope that that doesn't

happen I think it would be hard for her

to get that passed unless she also

became president and had control of the

house and the Senate thb which is

possible but unlikely I think at this

point so long story short both

candidates had proposals that in my

opinion are both good and bad I quite

frankly don't think I can really

encourage you to vote for either of

these candidates simply on the basis of

their housing proposals because in my

opinion neither is clearly better than

the other although out of everything

I'm most excited about Harris's

messaging on the supply issue we have

but I'm also least excited about her

messaging on needing thb more stimulus we

don't need that thb we do need the supply

so it'll be interesting to see if the

supply messaging that she has put out

which locally here in Greenville is

not a very popular thing people don't

want to hear we need to build more

houses so I'm curious if her saying that

is going to work right are people going

to listen to that respond well to that

that'll be interesting along with all

these other things we still have a

couple of months left not well actually

less than a couple of months we're

we're coming quickly to this

presidential election and it will have

an impact on on the real estate market

but probably not as much as people think

what the FED is doing has much much more

impact on the real estate market so I

will be focused much more on them that I

will be on the presidential election so

stay tuned thb we will be talking I'm

sure

about this next week what the FED does

and what impact it might have what the

headlines are saying all of that thb so

please stay tuned please like rate

review the show if you want to get more

of this content find my contact

information in the show notes if you

need a realtor in the Greenville area

and please use Piper Insurance whose

contact information is in the show notes

for your home Auto and Umbrella

insurance needs and we will talk again

next time