While Kamala Harris promises subsidies for buyers, Donald Trump is betting on tax incentives for real estate corporations. Meanwhile, Latin American investors are gaining ground in Florida in search of financial stability.
Whether under the sun in Miami or on the Great Lakes in Chicago, the US housing market is facing a difficult year. The answer lies in high housing prices, which are discouraging more than one potential buyer from taking a chance on a home. To make matters worse, many homeowners are reluctant to sell their properties, as they risk losing the low mortgage interest rates they obtained during the pandemic.
“Overall, the U.S. real estate market has suffered a downturn, as interest and financing rates have been quite high compared to previous years. So, this has not encouraged buyers to have greater flexibility to buy,” Peggy Olin, President of the real estate company OneWorld Properties, told AméricaEconomía .
However, Olin notes that the housing crisis is affecting each region of the U.S. to different degrees, depending on climates and homeowner preferences. For example, South Florida has historically attracted out-of-state buyers because of its warm climate and lower tax rates.
This difference means that buyers in Sector A continue to purchase ultra-luxury properties valued at over US$5 million in Palm Beach and Miami Beach. And while real estate developers are trying to satisfy the demand of this consumer profile, they still represent a minority.
“Then there is a buyer profile, which is made up of business owners or employees of large corporations, who want to move to Florida, and are looking for a property between US$1.5 million and US$5 million. Here the sales process required by this type of buyer is longer because the political and financial climate affects these decisions more, since it takes into account more whether the clients can finance the investment or not,” explains Olin.
In addition, there is a third type of buyer: foreign investors who buy properties in Miami and other cities in South Florida as a hedge for their own currency and to keep their capital in the U.S. or perhaps to evaluate an option to relocate.
This search for confidence in a strong economy is already evident in recent studies. As shown, in August 2024, the National Association of REALTORS (NAR) revealed that Latin Americans now represent 29% of foreign investors in real estate in the United States. Mexico and Colombia lead the podium among Spanish-speaking nations.
In fact, according to Dividenz, the real estate investment platform in the US, Mexican investors have invested more than US$4.2 billion in this industry between 2023 and 2024 , mainly in Texas (48%), California (18%) and Ohio (6%). For its part, Colombia invested US$900 million, allocating the majority to Florida (80%), California (13%) and Illinois (7%).
“Political insecurity and currency devaluation motivate people to move their investments out of their countries of origin and into a more stable place. Although this varies depending on the situation in the country: today it is Mexico and Colombia, but if we go back maybe three years, it was Chile and Peru,” explains Olin.
Another aspect that stands out in the Dividenz study is the importance of Chinese and Canadian investments in American real estate . The Asian dragon has invested more than US$ 13.6 billion, representing a quarter of the total. Its preferred markets are California (33%), Florida (16%) and Texas (8%).
According to the OneWorld Properties spokeswoman, the Asian dragon's preference for the West Coast over the American South has one key reason: Law SB264. This legal initiative by Florida Governor Ron DeSantis establishes, among other restrictions, that Chinese citizens without permanent residency cannot buy a property in the State. Sellers and real estate agents may also suffer a similar fate. "This measure has slowed their investments in South Florida, except for those Chinese who have American residency," adds Olin.
Canada, on the other hand, reflects the opposite trend: its northern neighbor holds third place in real estate investments with US$ 6.6 billion (10%) and its preferred destination is Florida (55%), while Arizona (14%) and California (4%) close the podium. “Canadian buyers do not necessarily decide on Miami, because it is often out of their price range, but they normally choose Florida and other warm states, because they are looking for pleasant places to spend their winters,” explains the spokesperson.
THE POSSIBLE ELECTORAL CONSEQUENCES
Beyond the climate and macroeconomic issues affecting the real estate sector, all attention is now focused on the presidential elections on November 5. Both Vice President Kamala Harris and former President Donald Trump maintain clear positions on the management of the sector.
For starters, under the slogan of creating an “economy of opportunity,” the Democratic Party candidate promises to expand investments in infrastructure. Welfare measures would also be included in the package: Harris wants to introduce a tax credit for builders who develop homes for first-time buyers. The latter will receive a subsidy of US$ 25,000 as financial support.
Along the same lines, Democrats propose granting a $6,000 tax credit for young families to “strengthen the middle class.” Olin has some doubts about this proposal. “I think that amount would be enough for a first-timer to buy their first home. I don’t think that would drastically change the numbers we could see or that it would be enough for a family,” he says.
However, a victory for Republican Donald Trump would also present significant challenges for the real estate world. The former president, a real estate magnate, would offer favorable tax cuts to developers and owners of large corporations. His restrictive immigration policies, which frighten foreign investors, should not be forgotten.
In this regard, Olin believes that if Trump repeats the policy of his first administration (2017-2021), it would be a mistake. “At the time, tax incentives made it possible for real estate companies to have more resources and promote stalled projects. Although it was also possible, because we had much lower interest rates, which shows that a single incentive will never be enough.”
Based on this premise, Olin recommends that the next US government, regardless of its political colour, should reduce taxes for first-time home buyers and affordable housing developers . “Because currently, property prices are too high and that prevents the average family from being able to buy their first home,” he says.
