How An Election Year Impacts The Housing Market
Every presidential election impacts real estate markets. There are no if’s, and’s or butt’s about that. The new president’s employment and economic policies will, and do, affect the strength of the housing market, as well as the price of mortgages. From these newly implemented changes, we have seen positive and negative turns from presidents passed. Most often, these changes happen in cycles during the same term. Pairing this with the adjustment period the nation experiences after inauguration, the market can enter a lull until the new commander in chief is normalized to the public. Many changes circumvent a new president, but what happens to the market before the new president is inaugurated? What does an election year mean for the housing market?
The answer is relative. It depends on the type of race the candidates are in: typical or explosive.
Typical Election Year
Little change is seen in a normal campaign season. There is some market anxiety on the behalf of both buyers and sellers, but that comes with the unknown outcome. No one wants to make a large financial move if those finances and rates might not be guaranteed. Eventually, outer lying factors still persuade wary people to list or buy a home. The lull between deciding to buy or sell is relatively small, because overall, the nation’s status quo is unperturbed and the candidates actions are typical. Every one is afraid of the change, to some degree. This fear is easier to push passed in a normal election. When it is explosive, that can be a completely different story.
Explosive Election Year
The lack of consumer trust during an explosive campaign season is staggering. There is no coincidence that the housing market shows signs of a shift right before a major election, especially when said election completely changes the national social climate. These elections are rife with animosity and up play by the media. It affects the social climate to an extreme. Everyone holds their breath to see who will win these kind of races. For the 2016 election year, it’s been predicted that home sales will decrease dramatically, even up to as much as two tenths to three tenths of a percent. Luxury homes (characterized by a $500k+ price point) can sit up to two years on the market before selling. More towards the middle, we are seeing the inventory sit for months and months before selling. The good news in all this is that the lower price points, $100k-250k, are selling only at a very minutely slower pace. This is in part to the more pronounced lack of first time home buyers, as well as the election. Overall, during a vicious campaigning season, the market anxiety is experienced to a much higher degree.
In all, any election will play a part in the housing market. Explosive campaigns cause explosive results, typical campaigns stay pretty mellow, and both will come with a shifting market. Brace yourself for the kind of election year you are facing, and contact me for professional guidance on purchasing or listing a home during an election year.