Aram Afshar, Broker Associate in our Los Angeles office, is renowned for his exceptional track record in luxury real estate.
With a deep understanding of LA’s diverse property market, Aram has successfully guided high-profile clients through some of the most prestigious transactions in the region. His strategic approach, unmatched market knowledge, and commitment to delivering bespoke service have made him a trusted advisor to discerning buyers, sellers, and investors alike.
In this Q&A, Aram shares his perspective on the implications of Trump’s victory for the LA property market, offering valuable insights into emerging trends and opportunities in this ever-evolving landscape.
Could Trump’s tax policies influence high-end real estate in LA?
Many real estate tax policies in Los Angeles (and throughout the United States) are governed by city, county and state laws. For example, there was a law recently passed by Los Angeles county voters that increased the tax on real estate sales above purchase prices of $5,000,000. It is not likely that Trump will be able to affect these taxes. However, if his general economic tax policies reduce income tax (among other tax benefits) for the wealthy, they may feel more positive about investing in luxury real estate purchases in Los Angeles and elsewhere.
What effect could tariffs have on LA real estate?
Economists are predicting that broad tariffs will lead to an increase in prices for various products and assets, also known as inflation. It could lead to appreciation of prices for Los Angeles real estate and other desired destinations in the United States. To combat the risk of inflation, the Federal Reserve would possibly reverse their recent course of lowering interest rates and possibly begin raising them again. This would increase the cost of borrowing money for property which is generally not a good thing as it stifles purchasing power.
What impact might a renewed Opportunity Zone initiative have on LA?
As it was written, the original Opportunity Zone Initiative is set to expire in 2026. Trump may seek to extend or amend it during his tenure which would continue to provide major tax breaks to wealthy real estate investors who develop new projects in underserved areas. While the benefits may take years to be seen, it seems as though the communities that the law intended to help most have not broadly felt the effects.
How might rising interest rates under Trump impact housing?
I predict that rising interest rates would continue to stifle the transactional activity that the United States has experienced over the past 2 to 3 years. There are fewer incentives for a property owners with interest rates fixed at 3% and 4% to sell and purchase a new property with a 7% interest rate. For first time home buyers, the high rates create a larger barrier to purchase and makes renting a more favourable option. Rising rates will also affect investors who rely on debt to finance purchases. It would make projects not make financial sense for investment purposes.
Could Trump's policies influence the LA rental market?
Los Angeles continues to be coveted destination due to its weather, various charming enclaves, and opportunities. With the Olympics and World Cup headed here in the next couple of years, there is even more money being poured in to develop and improve the city. Though the high interest rates have created an increased level of rental inventory, the market continues to be quite strong due to the general lack of supply.