U.S. Real Estate in 2017Property owners of luxury apartments in the U.S. and President-elect Donald Trump’s regulatory policies may affect the sector in 2017.

An excess in supply of high-end apartments coming into the new year indicates the conclusion of a seven-year building boom, amid a dearth of demand. This would possibly leave landlords with no other choice but to reduce rents and provide incentives, so they could lure potential tenants.

On the other hand, some analysts believe that a Trump presidency has already played a partial impact on the residential property sector, well ahead of his inauguration in January.

Fancy Living

The impact of a glut in supply of high-end apartments versus demand is yet to be determined for turn key rental properties across the country. Still, some developers are starting to do some damage control by offering certain incentives.

In New York, tenants can enjoy free rent on some apartment projects for up to three months, while those in Los Angeles are marketing projects that provide free parking for six months. Houston-based developers are also keen on signing up occupants at luxury projects by offering to waive security deposit.

Further, data from Axiometrics Inc. said that the gap between supply and demand of fancy apartments appears to continue broadening in 2017, as over 378,000 new apartments are expected to be completed across the U.S. within the year.

Trump’s Take

Ever since winning the presidential elections in November 2016, many have closely monitored how Trump’s fiscal agenda would affect the property sector. As his previous professional background mainly focused on real estate, it’s quite ironic that his policies are deemed by some analysts to be a bane to the industry.

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Trump’s expansionary platform on fiscal policies triggered predictions of higher inflation, which in turn caused an upswing in borrowing costs. Analysts supposed that these factors affected a 0.4% drop in pending home sale in November 2016 year over year.

However, not all analysts are pessimistic as there are some that suggest real estate as a good hedge against inflation.