As South Florida’s real estate market faces economic uncertainties, experts suggest that a potential second term for President Donald Trump could provide a significant lift, driven by anticipated policies that may improve access to financing and ease regulatory hurdles. While optimism runs high among some local developers and brokers, others note potential challenges that could impact construction costs and workforce availability.
South Florida’s Real Estate Resilience Amid Challenges
South Florida’s real estate market stands out for its resilience due to factors like ongoing population growth, corporate relocations, and a lack of state income tax. Nevertheless, the region’s development environment has been strained in recent years by rising interest rates, high construction costs, and growing insurance premiums. These pressures have slowed down home and condo sales, making many potential buyers hesitant.
Craig Studnicky, CEO of Miami-based ISG World, expects Trump’s policies to provide relief by supporting lower mortgage rates, potentially through quantitative easing by the Federal Reserve. If rates drop below 6%, Studnicky predicts a real estate boom, as more buyers will find it feasible to afford properties. “Get me rates south of 6%, and that is the tipping point,” Studnicky says.
Potential Rate Cuts and Financial Support
Lowering interest rates has been a top priority for many in the industry, including Nelson Stabile of Integra Investments, who believes lower rates will reignite development projects in South Florida. Isaac Toledano, CEO of Aventura-based BH Group, suggests that lower rates under Trump could also create more geopolitical stability, encouraging “smart money” to flow back into real estate investments.
Workforce housing developer Jeffrey Burns, CEO of Fort Lauderdale-based Affiliated Development, echoes this optimism. According to Burns, many investors have kept capital on the sidelines due to economic uncertainty, and Trump’s potential policies could revive investor confidence. “The rate environment is a huge impediment to development at this time,” Burns said, highlighting the difficulty of launching financially feasible projects under current conditions.
Eased Regulations and Tax Reductions for Banks and Developers
A Trump administration could bring about a more favorable regulatory environment, according to J.C. de Ona, division president of Centennial Bank in Southeast Florida. He believes that easing regulations and reducing corporate taxes would allow banks to lend more to developers, making financing more accessible. This could also benefit borrowers across the board, from individual homebuyers to large-scale developers.
The luxury real estate market could benefit from Trump’s potential tax cuts, according to ISG’s Studnicky. He argues that reduced tax rates will increase disposable income, attracting wealthy buyers to South Florida, where luxury properties remain in demand. Real estate broker Ana Bozovic of Analytics Miami predicts that South Florida will continue to attract high-net-worth individuals, especially entrepreneurs and creators, under policies that promote business growth and innovation.
Construction Costs and Tariff Concerns
Some experts express concerns over Trump’s proposed tariffs, especially on goods from China, which could increase costs for construction materials. Ellen Buckley, CEO of Prospera Real Estate Collective, notes that higher construction costs could make workforce housing projects particularly challenging to execute. A large portion of building materials used in South Florida comes from China, and additional tariffs could drive up these costs.
However, developers like Patrick E. Murphy of Coastal Construction and Togal.AI believe the industry is now better equipped to handle tariff-related challenges. During the first Trump administration and the COVID-19 pandemic, the industry diversified its supply chains, making it more adaptable. Burns of Affiliated Development agrees, pointing out that contractors have adjusted to previous tariffs and are better prepared for potential supply chain shifts.
Labor Shortages and Immigration Policy Impacts
Labor shortages could further strain South Florida’s construction market if Trump’s immigration policies, particularly those focused on mass deportations, are enacted. Murphy warns that a reduced labor pool could lead to higher construction costs. South Florida’s construction industry already faces a tight labor market and a scarcity of union workers and apprenticeship programs, making it difficult to find local laborers willing to work in harsh conditions. Murphy, however, notes that these deportations may be more of a political talking point than an imminent reality.
A Mixed Outlook for South Florida Real Estate
South Florida’s real estate market may see renewed growth and investment under Trump’s economic policies, with lower rates and eased regulations acting as powerful incentives for developers and homebuyers alike. However, rising construction costs and potential labor shortages present challenges that could limit growth in certain segments, especially for workforce housing.
Overall, the outlook is cautiously optimistic, with developers prepared to adapt to both the opportunities and challenges that may come with a Trump presidency, while keeping an eye on key policy shifts in tariffs and immigration that could impact the market.
