Market Trends
Overlooking RE Market in 2025
Edited by Stephen Lee with CRI
< Korea Times 1/3/25>
1. Uncertainty of Trump policy
- The house price rose for 17 month consecutively.
- First 100 days, tariff, tax cut, and immigration policy will be important to point the direction of RE market.
- Year end pent up demand will boost the sales depending on area.
2. Spring market might start earlier
- Price increase will continue to increase within 5%.
- DOM will be 50, but well upgraded house with properly priced houses will sell quick
3. Mortgage rate will stay in 6%
- 1st Qt rate will be high 6%.
- Toward end of the year, high 6%.
4. House price will increase
- Price increase will continue to increase within 5%.
- DOM will be 50, but well upgraded house with properly priced houses will sell quick
5. Inventory
- Minor inventory increase will continue.
- In some area, still lack of inventory pushes to seller’s market with persistent buyer demands.
- Range of 6% rates will push down buyer demand and desire of selling homes.
- Construction materials cost will rise, which will affect new construction somewhat – worst case, inventory might reduce bit.
Trump’s Policy
1. Immigration
- Trump will almost certainly impose strict border rules and begin deporting more undocumented immigrants. The administration may start deportation raids tomorrow, in Chicago.
- The unknown: Still, it remains unclear how far Trump will go. Will he focus deportations on distinct groups — such as people who entered the country recently, who already have an order to leave or who have been charged with a crime? Or will he also deport people who have been here for years and built stable lives?
2. Tariffs
- Trump campaigned on a promise to impose tariffs of up to 20 percent on any goods entering the U.S., and he is likely to enact some tariffs quickly. By making foreign goods more expensive, he hopes to help American companies even if the policy raises consumer prices.
- The unknown: There is a big difference between a sweeping tariff that applies to all goods and targeted tariffs that focus on specific products (like technology equipment) or countries (like China). Trump’s aides have sent mixed signals about which they will pursue, according to my colleague Ana Swanson, who covers trade.
3. China and TikTok
- The Trump administration is full of competing instincts on China policy, notes Edward Wong, a diplomatic correspondent for The Times. Several top advisers, like Marco Rubio, see China as a hostile power trying to weaken the U.S. Others in Trump’s orbit, like Elon Musk, see China primarily as a huge market. Trump himself frequently criticizes China but admires its autocratic president, Xi Jinping.
- The unknown: Trump’s China policy is among the most uncertain areas of the new administration. And it will require a quick decision — on TikTok. The Supreme Court on Friday unanimously upheld a bipartisan law forcing TikTok’s Chinese owner to sell it or shut it down. Trump said over the weekend that he would likely decline to enforce the law for 90 days. Will he ultimately fold and allow China to continue controlling TikTok? Will he broker a sale? Or will he shut down TikTok if Xi refuses to allow a sale?
4. Abortion
- Trump understands that abortion has become a losing issue for the Republican Party, and he is unlikely to do as much as abortion opponents would like. But he will still probably take some steps to reduce access, my colleague Kate Zernike says. One possibility is that he’ll make it easier for states to deny abortions during medical emergencies.
- The unknown: Pills now account for about two-thirds of abortions, and pro-abortion activists have succeeded in making the pills available even in states with tight restrictions. Those efforts have mitigated the impact of the Supreme Court’s overturning of Roe v. Wade. Whether the Trump administration clamps down on the interstate mailing of pills is the biggest question about its abortion policy.
5. Ukraine
- Trump has less patience for Ukraine than President Biden and many Senate Republicans do. As a result, the flow of U.S. weapons and money will almost certainly decrease. But the extent of the change remains unclear.
- The unknown: Since winning the election, Trump has sent mixed signals. He recently predicted that ending the Russia-Ukraine war could take six months (rather than one day, as he claimed as a candidate). My colleague Eric Schmitt says there is a good chance Trump will provide Ukraine with some additional aid, either publicly or covertly, to pressure Vladimir Putin to agree to a truce this year.
6. Iran
- Trump is more hawkish on Iran than on any other foreign adversary, and Iran is weaker todaythan it has been in years, thanks to its struggling economy and Israel’s recent military successes. Trump is likely to place more pressure on Iran than Biden did, starting with sanctions.
- The unknown: Is the next step a peace deal or a military attack? In one scenario, Trump would pursue a deal with tough terms for Iran, including an end to its nuclear program and restrictions on its support for extremist groups like Hamas. In another scenario, Trump would sign off on an Israeli military attack against Iran’s nuclear facilities, with potential U.S. cooperation.
7. Climate
- Trump shows little concern about climate change and will reverse some major Biden policies. My colleague Coral Davenport expects Trump to withdraw the U.S. from the Paris climate agreement, expand oil and gas drilling and loosen pollution regulations.
- The unknown: The fate of the clean-energy subsidies in Biden’s signature 2022 climate legislation is less clear. Many of these subsidies — for wind, solar and battery production, for example — flow to Republican House districts. Coral expects that some subsidies may be doomed (like the $7,500 consumer tax credit for electric vehicles) but that others may survive.
