The takeover

The retired couple down the street finally punted their Florida condo. It took more than a year and three failed deals to get there. But now it’s gone.

“We lost at least $175,000 on the place,” he told me as we both held poop bags (and dogs). “But it was worth it. I’d have taken a bigger hit just to get out. That market’s in freefall.”

Yes, it is. The average price is off, state-wide, about 5% y/y while sales have fallen and inventory increased. For the past few months listings have exceeded 180,000 – the largest number in history. And a whack of those sellers are like my local pal – Canadians desperate to flee back north.

Why?

Lots of meaningful reasons – a 72-cent loonie, surging insurance premiums, mortgages topping 7%, new border registration and special condo assessments – plus one huge negative, which is the US president. Florida seems to be MAGA central, and a growing number of we borderline-commie, DEI-loving, multicultural, progressive, tolerant and pinko, non-lethal beavers are uncomfortable there.

That’s been born out by a survey showing more than half the Canadians who own properties in the States are selling or thinking about doing so soon. Two-thirds of them cite “political and economic tensions between the two countries” since the orange guy came along again.

Royal LePage’s poll shows 54% of these folks want to bail. Of them, 62% talk about Trump. Says the company: “The polarizing political climate in the U.S. is prompting many Canadians to reconsider how and where they spend their time and money. Canadians have been the most important foreign investors in America’s residential real estate market for years, and a significant wave of property sales would leave a noticeable mark on the regional economies that snowbirds support.”

And look at a popular place for Canadian snowbirds to own – Sarasota. Three years ago listings averaged about 700. They recently surged to near 7,000, and currently sit at 5,500. The market is swamped. Sellers are stuck. And it could all get a lot worse. Yes, because of Him.

Trump is on the cusp of taking over the Federal Reserve, America’s central bank which has been independent of government since its inception. The Fed controls interest rates and overall monetary policy with goals of full employment, currency stabilization and economic growth. The Fed largely saved the country during the housing meltdown and Credit Crisis. It saved the USA with soaring interest rates during times of stagflation. It saved the country post-Covid when inflation raged north of 9%.

Every time the Fed did what it needed to do, politicians have squawked. Trump’s the same. He wants central bank interest rates (now at 4.25-4.5%) to crash by three hundred basis points, and is hellbent to make that happen. The president wants ultra-cheap money to goose the economy, inflate asset values, send stocks giddily higher, drop the dollar rendering exports cheaper, paper over the impact of tariffs, make borrowing rampant and reduce the massive cost of carrying $36 trillion in government debt.

The Fed has said phooey. Inflation is a worry. Tariffs are taxes. The bankers are cautious about unleashing a gush of new stimulus when unemployment is only 4%, the economy is growing smartly and stock markets sit at record highs. Nothing good, they say, could come from such a reckless policy designed only to get an economic sugar-high and increase Trump’s popularity for next year’s mid-term elections.

For his part Trump has disparaged, denigrated, insulted and dissed the Fed boss, Jay Powell – whom he cannot fire. But Powell’s term is up in May and meanwhile the president has decided he will secure a majority of support among Fed governors (there are seven|) so he can force rates lower that way.

Trump has three of his guys around the table now. He’s bragging that “we’ll have a majority soon” when governor Lisa Cook (the only black woman) is forced out over allegations of mortgage fraud. She was fingered by a Trump ally who heads the federal mortgage regulator and alleged on social media that Cook claimed primary residence status for two properties (you only get one) a few years ago before joining the Fed.

It was a deliberate targeted hit. Trump immediately responded and fired her. She is suing. 47 figures he has it in the bag.

So what would transpire if rates were forced lower by a CB bowing to the White House?

Mayhem. An economic crisis. Market turmoil. A big drop in the US$. The bond market would have a cow. The price of longer-term debt would fall and yields jump as investors demanded protection from the inflation tsunami that Trump would launch.

Rapid or deep rate cuts signal economic pain and usually herald recession. This would also damage the credibility of the Fed, which is held up as the gold standard of central banking across the globe. The yield curve would steepen fast as short-term rates (controlled by the Fed) plunge but long-term rates (determined by investors) swell. Our guys would have to respond.

American 30-year mortgages are dictated by those long bonds, so Trump-Fed rate cuts would see the cost of home loans jump. Bye-bye Fort Lauderdale.

There’s a reason monetary policy was removed from the hands of the elected. We’re close to finding out why.

About the picture: “Another great summer here in Norrhern Ontario (aka bunnypatch) Garth,” writes Ben. “Here is our neighbour’s pup Maddy on our morning 6 km walk. At eight years old she’s not quite as spry as she used to be, and often needs to sit for a moment to recoup, but she insists on coming along rain, snow or shine. Thanks to all who contribute to your blog Garth, despite some crazy negativity, it’s still is a great way to pass the time.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/08/31/the-takeover/