The Carolina Contractor Show
The Carolina Contractor Show
Housing Market Predictions if Trump Wins...
Can weather really make or break a construction project? Find out as we chat with Donnie Blanchard from Sure Top Roofing about how heavy rainfall and porous chimney materials are causing headaches for roofers everywhere. We also discuss how seasonal trends, like vacations and droughts, shape the demand for roof replacements, and ponder the far-reaching implications of a possible Trump presidency on housing interest rates and the construction industry. Don’t miss our updates on social media and YouTube, where we've been buzzing with activity, and join us as we remember Joe, a listener whose life inspired his community.
How do presidential elections really affect the housing market? We pay tribute to our beloved listener Joe before diving into this critical question. By examining historical trends and significant events like the 2008 housing crash and the 2021 COVID-19 housing boom, we highlight how market dynamics often overshadow political changes. Tune in as we discuss why house prices tend to rise during election years and speculate on the unpredictable moves of the Federal Reserve in response to a potential Trump win.
Is deregulation a double-edged sword? In our exploration of government policies on the economy, we look back at how tax cuts and deregulation have spurred growth in the past, while also considering the risks of such strategies—illustrated by the 2008 financial crisis and recent lumber price surges. We then tackle the pressing issue of inflation, discussing its impact on daily life and the economy, and share our hopes for the upcoming election’s influence on economic policies. From grocery costs to new energy regulations, we cover it all, making sense of how these factors affect you.
Welcome to the Carolina Contractor Show with your host, general Contractor Donnie Blanchard. So, donnie, are you suffering from drought conditions anymore? Not at all.
Speaker 2:We got a lot of rain in the last week or so and it goes from nothing to everything and it seems to be that way every year. But very grateful for that because, man, we were in a dry spell. Does rain affect?
Speaker 2:your business sure-top roofing, it does a little bit in terms of leak calls. We tend to get a lot more leak calls when the rain hits, especially if it's consecutive days I think we've talked about it on the show before where we get a lot of chimney leaks, and when a chimney can't dry out and it just gets pounded for three consecutive days. You know, brick block, even the mortar between stone is all porous, so once it penetrates that outer layer, you know the only way it can go anywhere is to go inside the house, and so we see a lot more leak calls. But yeah, even with the drought situation it affects us as well. And that goes right along with vacation season, when people are spending four or five $6,000 on vacations for their family.
Speaker 2:You know that roofing is a is a big ticket item. There's no secret there. So they tend to kick that can down the road. So we we go from slow until where we were just about last week when things just broke wide open. And you know if this is about the ideal or the best time to get a roof replacement done at this time of year, or, you know, spring is pretty close to the same. But when you come out of winter. If winter lasts an extra three or four weeks, that affects that. But yes, sir, all the way around, weather conditions, vacations, drought, it all affects us differently every year.
Speaker 1:And I know you're not a big fan of brick chimneys because as a roofer and owner of Sure Top Roofing, you see that as an intrusion point for water. I love a fireplace. We've got one. I've used the Thompson's masonry water seal. I know there's commercial versions of it and I put that on. It does well. So I understand your point of going, ooh, a brick chimney. A mason chimney means water can get into the house. I like to have a roaring fire, real school fire, and I like the look of a brick chimney. Again, if you need something done with your roof, especially an inspection, you can contact Sure Top Roofing website, suretoproofingcom.
Speaker 1:Now, we're not a roofing show, though that obviously, donnie, is a big part of what we talk about. This is the Carolina Contractor Show. We like to talk about your house in general, things you might be doing, building construction. Today's subject is going to be how a possible future Trump presidency will affect housing interest rates, construction world. We're going to make some predictions of what we think and we're not the brightest people in the room. I mean, I'm the brains and Donnie's the beauty, but we'll just kind of chat about that. But I want to direct you to the website because that gives you links to our other things, like our Instagram YouTube page. You can go right there and see videos that we've downloaded. We've got some short videos about specific questions that people have submitted and we're going to do more of those in the future, but we're putting up our shows there also. And you've got the Facebook link. You've got the ability to ask us a question or make a comment or recommendation. It's the ask the contractor button. If you have a question about your house, submit it right there. Donnie gets it. He's also a general contractor and owner of Blanchard Building Company, and that's one of the reasons we're going to talk about what a possible Trump presidential win will do for the economy when it comes to building.
Speaker 1:Crazy week, past couple of weeks we had a president shot. The other one gets COVID disappears for a while. I think we went five days without seeing or hearing anything from him and then on a Sunday he says I'm out of the race and I'm stepping aside for the good of the country. I like to say, joe Biden saying he was stepping aside for the good of the country is like Caesar saying he was stepping aside for the good of Rome. No, he was stabbed in the back. He was pushed out in history right now. But it's hard to stand outside of it and realize in 10, 20 years, and especially our kids, will look back and go that ass was crazy. That was going on back then.
Speaker 2:Yeah, I think that Caesar comparison might be a little more true than you realize because stabbed in the back kind of sounds like what happened. But that was a very good analogy. And before we get too far gone from what you mentioned with the social media, I wanted to tell everybody that I had several YouTube videos I did not realize were marked private and we just tried to make our big intro on YouTube and bridge the gap from podcast to on the screen with the radio show. So if you guys have time, give us a subscription, give us a like and check out some of those videos. I think it was about six or seven of those and we put a lot of time into that and little did. I know they were marked private and I saw that they got zero views and and that was the reason why. So that's on me, but try to do a better job with that. But you know, I think it's a little more of a personal touch for us to be on video along with the audio.
Speaker 1:Yeah, I agree with that. Again, go to thecarolinacontractorcom and you can find the links to the YouTube page and that'll allow you to subscribe to it there. And last thing, Donnie, before we start the show, you wanted to talk about a friend of the show and someone that you knew personally.
Speaker 2:Yes, sir, I just got goosebumps when you said that we lost a loyal listener to the show this week and I'm actually building a house for his son and his daughter-in-law. But Joe Dixon owned a transmission shop in Burlington, the town that I was born and raised in, and I didn't know this until I finally met Joe just a few weeks ago and basically his son's done a great job at accumulating materials and he found a deal on this and that for the framing package and Everything was stored at Joe's shop right there on Church Street. I go by to take inventory and put in an order for the first floor system that we would need. I get to meet this guy man, he was a joy. Such a big personality, such a fun guy.
Speaker 2:We hit it off like we had known each other for 30 years, but he quoted several things that we talked about on the show and we lost Joe this week. But very loyal listener to the show, very good man, his family loved him so much and I've really seen all that transpire this week. So I just wanted to give our platform to a moment of silence for Joe. So if we can just give it a second with no show, I think that's a great way to honor somebody like that.
Speaker 1:And I didn't know, joe, but how you talk about them. There's a lot of people that we come across in life that are just that salt of the earth, genuine person, and you don't need to have met them personally to know the impact they had on your friends and coworkers and stuff.
Speaker 2:I appreciate that and basically he told his son to call me and his son was gonna build his forever home and he said he had been listening to our show for a long time. He said call that guy.
Speaker 1:And it turns out that we had other family ties once we got involved but I never knew that until we met face to face that he recommended his son give me a call and gosh, that means so much. Good, honorable tribute there, donnie. So today, what we're going to talk about on the Carolina Contractor Show is we're going to do some predictions and we've really never done this before on a whole lot of subjects but we're going to dedicate the whole show to, if Trump wins the election, what are some things that could happen. And we're not going to focus on, uh, gaza and Israel and international this and stuff. We want to focus on things that will have an effect on um building homeowners uh, buyers, sellers, people like yourself. But we want to talk a little history before we get into the predictions, and you've accumulated some of this information, donnie. You want to start off with some of the factoids about this. Sure.
Speaker 2:Yeah, I never really cared about politics until I got out of college and, more importantly than that, until I started paying taxes. I thought why does this money just go out the door for no reason? But when you look at the big picture and how house values have went up each election year, people say that election years are a bad time to buy. But not necessarily to buy, but not necessarily. Prices averaged about 5% of a climb every year since 1987. So that's not crazy. That's kind of the norm In non-election years. It was 4.5%. So that might lead to some kind of conclusion that elections are good for the housing market. But there's just so much more to that.
Speaker 2:The worst year for the housing market everybody remembers was 2008. And house values plunged about 12% that year. So that was huge. And that didn't have anything to do with Obama versus McCain. Both advocates for each party are eager to put the blame one way or another, but really it was the bursting of the bubble that we had between 2004 and 2007. So things got really good before that. On top of that, the global economy seemed to be collapsing around that time.
Speaker 2:If you rewind back about four years, one of the best years for housing prices was 2004. And I think they went up around 13 plus percent that year and that was basically due to an inflating housing bubble. And we'll get into some of the reasons that that happened, because we've seen the recreation of that not so long ago and you know it wasn't anything to do with George Bush, so to make political references for who was in power at that time. But the best year we've seen for value since then was in 2021. And people thought, oh, my word, you know house values have shot up and it's so expensive to buy a house.
Speaker 2:I think the numbers are 19% is what they shot up in 2021. It might be a little more than that right now, but that was because there were record low mortgage rates, the COVID-19 housing boom, where people were willing to make the jump to accommodate their new lifestyle. A lot of people could work from home for the first time. So they said, hey, I'm going to invest in a nicer house because I'm going to be living and working out of this place and you know nothing to do with with Joe Biden. So just to say that there was no, no blame to be cast either way there. So my conclusion is it kind of seems that the real outcome is not dictated by the president. It's more or less dictated by the market and the economy at that time. So, that said, when we dive into the subject for today, I think that we can just tweak a few dials and have a major impact on the housing market.
Speaker 1:I agree with that a hundred percent. So what we're going to do is kind of give our opinions. I'm going to make an assumption that a lot of this stuff we might agree on, donnie, and that's fine. We might find some things we disagree to. The number one thing we talk about is interest rates, because that's fine, we might find some things we disagree to. The number one thing we talk about is interest rates, because that's what everybody says is one of the reasons they can't buy a house. So let's make the prediction that Trump wins. What do you think the Federal Reserve will do during his administration? Do you think they'll try to raise, keep them the same, or lower interest rates?
Speaker 2:You know, I don't have any idea Half the time people are behind him and half the time people are against him. So if he does win, I think that he sees he's a businessman. I think that he sees the problem. I think that he sees that the interest rates are ridiculous. But you know, the only time that they usually lower the interest rate is when we're in big trouble, and so when we're facing a recession, that's a way to offset that for the majority of the American people. So I'm not sure what they're going to do there. I would certainly like for them to lower the interest rate, because that affects a lot of people, but I'm kind of on the other side of that. Where I built my house 12 years ago, I refied when the interest rates were low. So that refinance lowered my payment so much that I'm in a good place. But I know that that's not the story for a lot of people.
Speaker 1:I do know that, recently, trump said he doesn't want the Fed to make any changes until after the election. I think his reasoning is probably I know this will come as a shock is for his own good, because he thinks they're going to go down. So wait till after he becomes president, and then he can take the position of hey, they went down because of me. The Fed, though, should be nonpartisan they aren't always and they should adjust interest rates based on what is practical and pragmatic, and not do them because of who's in office, but they do tend to have a little decrease in an election year. That being said, one of the problems with low interest rates that it will spur buying and that can spur inflation, and if more people can afford a house or afford things because interest rates drop too quickly, then you're right back to a supply and demand issue, but when interest rates are high, it can quickly stall.
Speaker 1:So my prediction is this they will go down. I think it's going to be a feather, and we're never going to see one or 2% rates ever again, because that was really strictly to COVID. So I say they've gone down a point. In a year, they'll probably go down. Another point Will they go below five in the next couple of years. I'm not seeing that.
Speaker 2:Can you blame them for doing that? We're just a few short months out and the interest rates have been god-awful for the last several months. And I think any politician would do that, because they understand what it takes to get elected and of course they want to take credit for it, Just like this current administration took credit for all the jobs when people went back to work after COVID. They wanted that, they wanted what the young people say, they wanted that smoke and they wanted to take credit for all the new jobs. And of course he wants to take credit for dropping an interest rate. But I think I agree with you on that, because if it drops it's going to be like a feather, it's not going to be heavy. It would be wonderful if they could get back down to 5%, but the days of 2, 3, 4, I think they're gone forever.
Speaker 1:We know with, at least on paper if you're conservative, you're for tax cuts, less government regulations. If you're on the left side, you're for more taxes, more regulations, and I'm not saying that you're making those regulations to be a jerk. Sometimes the belief is this is a good thing and there are good regulations. Don't get me wrong. I don't think you can go too far and throw the baby out with the bathwater. But Trump, in his first term, was clear about tax cuts and lowering regulations and I don't think it's unfair to say it really did spur some significant economic growth and some advantages.
Speaker 1:I think he's going to try to do that again. I think he's going to try to make some tax cuts permanent and I think he's probably going to go back to tariffs. I mean, I'm not great on international trade, but I do think his talk about raising tariffs on other countries made them take notice that he's playing hardball and they started to level out the playing field. So, when it comes to tax cuts, yes, he's going to try to get what he can of reducing taxes and business and individuals and deregulation yeah, because after he left, the current administration came in and re-regulated if that's a word a lot of things. I think he's going to go right back to doing that deregulating.
Speaker 2:The tax cuts. I'm all for and, of course, I own two businesses and I get raked over the coals when it comes to taxes. Nobody likes paying taxes and I understand. Pay your fair share, but we've been beyond a fair share as business owners. And they say that I'm technically a small business and I don't get the tax breaks that I think that are fair for the size business and the volume that we do.
Speaker 2:Deregulation to hit on that. I think that deregulation sounds great. Don't regulate anything, just a wild west for everybody. And deregulation is kind of what threw us in that problem in 2008,. Because they deregulated the requirements for young people to buy. They would let anybody get a loan, and so there were so many people that got home loans that had no business acquiring a quarter million dollar mortgage and what that did is set all those people up for failure. And then you know you see the foreclosure boom happen as a result of the deregulation. So deregulation is not always great. When when you're for that, I think you should read up on what they're deregulating, because you know keeping people what are you saving somebody from their self is not a bad thing.
Speaker 2:And then the tariffs you know when we did this thing when lumber prices shot up, we were getting the majority of our lumber out of Canada. So there were major tariffs being imposed on Canadian lumber and the domestic lumber production just couldn't keep up. And on top of that I think we commented on this a couple of years ago on the show that you know, the domestic lumber suppliers here in the United States were increasing their prices, thinking, well, if you're going to pay that for Canadian lumber, then I'm going to get mine. And that's exactly what happened. And it got out of control to the tune of, you know, 30 percent more just to build a house, because you know, of course, the bones of most houses are wood. So there's so much to be said about the tariffs, the deregulation and the tax cuts, but I think, you know, maybe deregulate things moderately, you know, definitely cut taxes, personally speaking, and um, and I just think that the tariff thing is a case by case scenario on what material they're going to impose tariffs on.
Speaker 1:And I don't think a lot of people understand where lumber comes from. We think it comes from, uh, the United and Canada, and we get shipments of lumber in that come from Germany, that come from Sweden, and so it's a worldwide industry. And sometimes we get a load in a lumber of, say, 92 studs that come in and it'll be Canadian, and then a load comes in four hours later and it's got international markings on it and it's also 92 studs. So, depending if it's pine or spruce or whatever the lumber might be, from four or five different countries, tariffs are going to have an impact on that. Speaking of the same thing, donnie, of houses in the housing market, this is more of a place you can predict or talk about, so I'm going to stay out of this. But what housing market predictions do you have if Trump wins?
Speaker 2:I think that he will incentivize homeownership and right now there's been a problem for a lot of folks who just can't afford a decent house. What used to cost $200,000 is $300,000. And that's a big deal to a lot of families because your debt to income ratio is going to dictate what you can afford from a finance standpoint and there aren't a lot of people out there who can just pay for their houses outright. So I think that he's going to incentivize homeownership and in past efforts he's done things like extend eviction moratoriums. He's proposed privatization of Fannie Mae and Freddie Mac, which I don't really understand the end game with doing that, because I just never dove into that part of it. I'm on the builder part, not on the finance part. They get the financing and then they come to me, but extending the eviction moratoriums. We've got people who own a lot of rental properties and that wasn't good for them, so good for the renter, but a lot of people took advantage of that and folks that we do a lot of work for ended up in court unnecessarily. So I don't know that that was necessarily a good thing and it sounded good because people were out of work and couldn't pay their rent. But, like I mentioned, the people that took advantage of that are still doing it.
Speaker 2:One thing that was cool he did is he introduced a tax reform called an opportunity zone and that stimulated investments in underdeveloped areas. So there are places where it might be outside of the bigger cities, and that incentivized folks to build in those areas because land is cheaper. And funny enough and you and I see this now you go to Raleigh or Charlotte and as you get away from the bigger cities, it seems like things get cheaper by the square foot. So we're both an hour from Raleigh and it costs a lot less to build here and where you are than than in the big city. So, um, just things like that opportunity zones, I think will be a big deal and hopefully puts that back into place.
Speaker 1:Yeah, it's kind of like the uh. We have an Eastern North Carolina, the uh global trans park and they've spent many, many years trying to give incentives to companies to move to the Eastern part of the state, with questionable success. But I think you have to have people wanting to live there first before business is going to come there. And I think you're right If you give people a good reason it's a tax write-off. What we're basically talking about buy a house in this area, it's going to be cheaper and it's also going to give you a tax write-off is fine. The government clearly proves they can't spend our money well, so let us make that decision Now.
Speaker 1:All these things we're talking about will impact house prices, and so this prediction and again, this is the Carolina Contractor Show. We're pretending Trump wins the upcoming election and where some things he will do that will affect the industry of construction, building houses, pricing of housing no-transcript. Why can't a second or third time home buyer I don't mean buying a second or third house, but they're moving have an incentive to buy and and and maybe give them a housing a special interest rate? So maybe that's not a prediction but a hope. I don't know.
Speaker 2:Yeah, no, it sounds good and it makes sense. It's just like you mentioned. Obviously the government's not good spending our money. So whether they'll make a common sense decision or you know something that's good for the masses, I don't think they have a knack for doing that. You know.
Speaker 2:Affordable housing I'm all for it and I'm kind of in a different market because, being a custom home builder, you know those folks probably made a mint when they sold their house and they have the money to go into the new house and not have to finance so much of it. So kind of in a different category. But with the young people, man, it's a big deal. Can you imagine getting out of college today and going to buy just a regular house? And you know a small house is 280 grand. And you know I have a, I have a kid and he's looking for a place to live and and you know people say, well, you've got to push them out the door and kick them out of the nest and things like that. But if you love them, let them accumulate some money and maybe wait for this bad time to pass and maybe the market will stabilize.
Speaker 2:I don't know, with where we are, if the price of housing will ever go back down because people are moving here in droves and you know I mentioned a couple weeks ago we're the third most influx state in the country behind Florida and Texas state. In the country behind Florida and Texas and right where we are in the middle third of the state, the corridor of 40 and 85 are merged between Greensboro and Hillsboro. All the big businesses want to come here, so I don't know that this part of the country will ever slow down. But I'm anchored here and rooted here, so kids can't live with you forever and I'm all about them getting out on their own but at the same time do not want to put them in a bad financial situation.
Speaker 1:Now my son's getting ready to start college and we've said the same thing I don't want you any of my kids my two daughters are the same way. You get out of college and you need to get on your feet and you need to come home. My door is always open. I will take care of you. I will help you get on your feet. I I will take care of you. I will help you get on your feet. I'm not going to throw you out there, and I don't think there's anything wrong with your kid coming back, especially after school, to get on their feet and build up some wealth and work. It used to be the norm. It still is. In a lot of the world, kids live with the parents for a long time because they're productive and working, and we have this idea get them out of the house, and I'm not going to do that.
Speaker 1:I do want to tackle one more thing Inflation. This is a prediction that's weird, because we technically didn't go into a recession, though I'll tell you, we went into a recession. We just pushed the goalpost around, so the current administration didn't have to admit it. But what do you think is going to have with inflation after this touted Inflation Reduction Act, which was really just a giveaway to green companies and projects. Where do you think inflation will be going? Because it's not going down. It's not increasing as much right now, but they're saying that's a drop. It's slowing down the increase. What do you see with a Trump election? Donnie, I hope and pray. This isn't a prediction. It's slowing down the increase.
Speaker 2:What do you see with a?
Speaker 1:Trump election.
Speaker 2:Donnie, I hope and pray this isn't a prediction, this is a prayer that inflation goes down, because I see it across the board and fortunately I've been blessed to have plenty of work through the inflationary period that everybody just went through. But if I make a $100 grocery trip, that's more like $160 now, and if that's hitting the average American in the pocketbook more like 160 now and if that's hitting the average American in the pocketbook that extra $60 every grocery trip that limits their capability to improve their house and to spend money on other things. So it's not just the housing market being affected and I think that the inflation if whoever wins the next election has to tackle the most important thing. I think that's the biggest thing on the table right now. Interest rates may keep you from buying or selling a house at the moment, but inflation affects your every single day life and, like I mentioned earlier in the show, the inflation. I mean I'm sorry the interest rates may not drop until we really get in trouble, but inflation is something that I feel like is a bigger deal and that, in my world, compounds on top of a lot of energy codes that they're in.
Speaker 2:But they didn't just hit us with inflation. About two months ago they put something in place that hasn't transpired yet and maybe we can talk more in detail next week on the show about it. But there are certain things energy code wise where they're catering to the green climate change folks and putting energy restrictions and requirements in place in the building code that are affecting everything, and so they're running the cost to build a house up another $20,000, $30,000 on an average house by putting these into effect, and I do believe if the administration changes in a few months, then that's something that could be corrected or eliminated before it goes into play. But a lot of things going on behind the scenes that affect everybody and inflation's right in your face, but things like I just mentioned are something that they're trying to sneak in behind the curtain.
Speaker 1:And this is the thing that causes inflation to go up government spending. It's the number one influencer of inflation. So when I say Trump, I hope you win you're not going to do anything about inflation or interest rates. If he just says so, we're going to spend here, here and here without cutting more somewhere else. So there has to be a lot of cuts.
Speaker 1:The government of the United States doesn't produce a service or a product on its own. It taxes services and products. It might manage some of them through government programs, but the spending is what causes inflation to go sky high and out of control. So regardless of who gets elected Trump or Kamala, it doesn't matter. They've got to cut spending. We just, let's be honest. We're not trying to be political. The left side isn't going to be big on cutting government spending. The right doesn't do too good at it either. So that's going to be the issue. You can pass all the programs you want, all the ideas, all the tax cuts, but if you don't cut it somewhere else, the inflation rate is going to be stubborn and stuck there, and that's the elephant in the room. Address the inflation and watch the rest of it just disappear and go away.
Speaker 2:I agree, that was very well said and that elephant definitely needs to be addressed. And you know, I think it's going to affect the next generation. And you know, these kids I sound like an old guy, oh wait, I am an old guy, but these kids, these kids, man, the world that they're growing up in isn't the same thing that we had. And wasn't it a beautiful life when we only had about four or five channels on the TV, no Internet and, you know, basically a house phone, only that everybody had to share in the family. And my, my, my. What a different world we live in.
Speaker 1:And you know, donnie, back in the early eighties, when we look back and romanticize it, we need to tell all these younger generation kids the interest rates for a mortgage back then were 14, 15, 16%.
Speaker 2:Everything cost a lot, lot less back then and a lot more skilled labor out there, and you know, no, no, labor shortage, materials supply wasn't an issue, and you know a lot of other factors. But yeah, 14%, that does sound insane, doesn't it?
Speaker 1:I don't know how my dad did it, but he did it. Uh well, we thank you all for tuning into another episode of the Carolina contractor show. Again, we're going to have this episode up on the YouTube site and you can go to the website the Carolina contractorcom to get in touch with us. Find links to the show website the carolina contractorcom to get in touch with us. Find links to the show. You can download past shows in the podcast form. You got a question about this show or any other, or you just have a question about your house? You can submit that by clicking on the ask the contractor button. And, donnie, before we go, uh, you care to give an idea of who you're voting for this fall. You really want to know?
Speaker 2:fine with me, here we go, see if this tells you.
Speaker 1:All the way. Well, I'm in agreement with you and if you want to know the answer to that question I asked Donnie that we both have the same answer to, you'll have to find the show on YouTube and you can check that out on video Again, go to thecarolinacontractorcom. Again, we thank you for tuning in. We hope you join us next week on the show. Have a good one, donnie.
Speaker 2:Same to you, Eric, Take care everybody.
Speaker 1:Thanks for listening to the Carolina Contractor Show. Visit thecarolinacontractorcom.