The world was shocked Tuesday night when Donald Trump managed to pull off one of the most stunning upsets in American presidential history, winning the White House with a handy lead in the Electoral College. Democratic challenger Hillary Clinton had been heavily favored, with some media outlets giving her higher than 90% chances of victory.
The Trump victory sent shockwaves through global markets the day after the election, with futures markets hit especially hard. As the financial world begins to make sense of this election and what it means for everybody's future, I decided to speak to those in the real estate crowdfunding market to gauge their reactions and predictions.
Jordan Fishfeld of Chicago-based CFX Markets speculated that from a purely financial markets standpoint, Trump's presidency and the Republican legislature that comes with it could be "...an opportunity for growth in this industry, albeit a costly one. One of Trump's main platforms was that regulation is hurting business...I think we can expect to see a reduction in oversight and regulation, which should benefit the flow of capital to small and medium-sized businesses, which will be tremendously beneficial for crowdfunding."
Brian Dally, co-founder and CEO of Groundfloor, concurred with the idea of Trump-as-opportunity, but pointed to a different reason.
"This election result appears to be creating volatility in financial markets. Volatility tends to attract more investors into real assets, like real estate." Dally also mentioned bonds, which have surged since the announcement of the results.
Others, like Marty Coyne, CTO of Connected Investors, are even more enthusiastic. "Trump is legendary for his strategies and challenges in attracting capital to his projects. Because of his background I think he will be favorable to anything that would help real estate investors find capital."
Coyne reiterated the idea that Trump and his Republican-led Congress would help the markets by scaling back regulation, specifically quoting Trump's criticisms of the Dodd-Frank financial regulation law that was one of the crowning achievements of Barack Obama's first term. He also expressed a sentiment shared by Jordan Uditsky, a real estate attorney with Gould and Ratner, about Trump's plan to rebuild the nation's infrastructure and its positive effect on the real estate industry.
"Now we have an entrepreneur in the White House, who's going to want to foster other entrepreneurs...with his infrastructure projects, more people are going to be trying to do developments, which means more people trying to raise capital."
Dara Albright, a writer and crowd finance educator, echoed this sentiment, and drew comparisons to the financial ramifications of the UK's Brexit vote, which she argued was, like a Trump presidency, an "opportunity."
"Our markets are so destroyed and broken. They don't work for the small investor, and they don't work for the small business or the entrepreneur," Albright told me, channeling a bit of Trump's fiery populism. "A Trump presidency will help us return to investing into one another, community investing, peer to peer investing, etc. People have had it with the volatility of the markets, they feel like it's a rigged system, and I feel that this is an opportunity for our industry to make a difference."
Not everyone I talked to was optimistic, however. Mark Roderick, a shareholder of Flaster Greenberg PC who runs a website/blog devoted to crowdfunding, was much more reserved in his assessment of any benefits a Trump presidency might bring.
"My overarching concern, having seen the overseas markets and the futures on [election night]...is that the election of Trump and the policies that he and the Republican congress are about to enact are going to lead to a recession," Roderick told me in a dejected tone.
When I asked if he thought more unstable global markets might lead to more investment in real estate, Roderick answered in the negative. "People are not going to choose real estate. If people are afraid, they're going to put their money into the money markets, which is what they should do."
It is clear that there is a spectrum of opinions and expectations about what the new administration will mean for those in the real estate crowdfunding world, but overall the dominant tone is one of cautious optimism
Perhaps Brian Dally, from Groundfloor, put it best when he said: "Because real estate crowdfunding is still new, still growing, it's gonna grow no matter what happens. Real estate crowdfunding is on its way up."