Phoenix area real estate has been experiencing an undersupplied market for the past two years, but promises made by president-elect Donald Trump could change this fact.
During Donald Trump’s campaign, he promised a mass deportation of all illegal immigrants, which could have an impact on housing markets across the country, especially Arizona.
According to the Cromford Report, a regional research group on the housing market of the Greater Phoenix area, new listings over $1 million were down by nearly 14 percent in November, while listings under $300,000 went down by 10 percent.
Like many industries, the housing market is holding its breath to see what the new presidency will bring, and experts said it is near impossible to predict 2017 real estate trends as many legislative variables could have serious effects on the market.
According to a Pew Hispanic report, in 2014 there were an estimated 300,000 unauthorized immigrants living in Arizona.
Michael Orr, founder of the online Cromford Report, said “This (deportation plan) obviously has a huge impact on the housing market as when people are deported, they don’t need a house. Then the question is are we talking about small numbers over a long time or very large numbers over a long time.”
However, some are less wary about the sudden increase of supply.
Kerry Jackson, a real estate agent of the Phoenix Area, said “The vast majority, or probably exclusively all illegal aliens don’t own their homes, they are probably all renters.”
Jackson said this would soften the demand on the rental market but he does not believe it would have a significant effect on home sales.
Mark Stapp, executive director of the masters of real estate development program at the W.P. Carrey School of Business at Arizona State University, said that sending so many people out of the state could create a large over-supply of housing.
“You’re probably going to see some playback in capital rushing to apartments,” Stapp said.
Most people living here without legal permission are not homeowners, but with large vacancies in apartments, renting costs will likely go down and more people will choose to move into apartment complexes, leaving an oversupply of homes Stapp said.
With Phoenix area in an undersupply, this could perhaps level out the market or send it into the opposite range of an oversupply.
Orr, Jackson, and Stapp agree that with this presidency, the housing market as a whole could be affected in many different ways, or not at all.
“Some presidents we have had a better idea of what’s actually going to happen. I think until that is resolved, which will be several months, I think the market is going to remain unsettled,” Stapp said.