Barry Habib, Logan Mohtashami says the real estate market is set for an increase in demand
Supply restrictions, capital gains adjustment
Although demand may increase, inventory remains tied up.
Audience members asked about measures to improve supply – including changes to foreclosure laws in areas where housing stock is tight.
Habib said that while capital gains adjustments may boost inventory temporarily, the impact on long-term inventory may be limited.
“Inventory, to some extent, can be a wash when a mortgage buyer comes in,” he said. “So, you can get more sellers out there. I’m not sure that’s going to create more inventory without that initial rush, because if you get that seller, you’re going to wait for that buyer to come in — and then that person buys a house, the inventory is a wash.”
Mohtashami said capital gains limits adjusted for inflation would cover more homeowners and encourage sales.
“If you were to deal with inflation, you have a very high price that would cover a lot of people,” he said.
The decision of the Supreme Court of taxation
Market participants are watching closely what awaits Supreme Court decision on spending by the Trump administration.
Members of the audience asked if the decision declaring illegal rates would affect rates.
“I think it could be a problem in the bond market,” said Habib. “That’s because you got $300 billion in additional revenue. Without that revenue, you’re going to have to issue more debt. So, the bond market is very sensitive to additional debt issuance, and it’s a significant amount. Now, there are other actions the President can take with appeals and so on — so I’m not 100% sure which way.”
Mohtashami also highlighted potential concerns about debt issuance.
“If those expenses will end, or worse, to some extent, they need to be funded, that money comes from the Treasury,” he said. “We still have to pay our debts, and that means we have to issue more debt, and that has to be resolved by the markets.”
China, Japan and the “paper tiger”
Questions also turned to China and Japan and their US Treasuries. Concerns arose as to whether these countries could destabilize the markets by selling debt.
Habib said China’s strategy was deliberate but ultimately limited in effectiveness.
“China has been trying, especially recently, to stop banks from investing in US Treasuries,” he said. “This strategy, although it hurts the US, it also hurts China, because if the Renminbi becomes more expensive, its exports will suffer because of it.”
Mohtashami dismissed the alarmist sentiments.
“It’s a rubbish statement,” he said. “It has always been the theory of Internet people on YouTube, and I urge everyone, to be careful who you listen to on YouTube, Instagram and Tiktok. Those are not experts. China has been throwing away our values for many years. China is a paper tiger. The population growth of high-class people increased around 2015, like Japan. They will have a demographic problem.”
With pent-up demand, multinational buyers and a depressed market for years, 2026 could be a landmark year for US homes after the post-COVID crisis.
