Presidential Elections and the Real Estate Market
It’s a confusing time to be in the real estate market
With both sides lecturing about the economy, and often contradicting each other, it’s a confusing time to be in the real estate market as a buyer or a seller. Traditionally, presidential races generate some insecurity in the housing market which effects attitudes among home shoppers, sellers and investors.
History reveals that market trends after a presidential election are more predictable when the outcome of the election is also more predictable. However, when there is notable uncertainty about who’s going to end up in the oval office, that uncertainty tends to filter down into other areas.
Seasonality always has an effect on home sales
Meyers Research analyzed data over 50 years to understand the divergences in the real estate market and determined that while seasonality always has an effect on home sales, it is more distinct during election years.
Their data indicated that over the past 13 election cycles the median change in sales activity during an election year was -15 percent, while the change the year after an election is -8 percent. Experts agree this is because people don’t like making life-altering decisions, such as buying or selling a home, without knowing what the future holds.
Buyers are more hesitant to make a purchase, preferring to wait on the sidelines for the election to conclude. This is even more common when an incumbent is leaving office and a new president is expected to take over. Subsequently demand seems somewhat reduced, but in actuality it’s just pushed aside until the market becomes more stable.
Sellers can also be cautious about putting their property up for sale in election years due to a widespread impression that it won’t get the value it deserves. Therefore, they may also elect to wait it out until the market stabilizes.
The motivation for owning real estate can also be subject to change based on federal, state and local elections. Incentives can increase or decrease depending on what people are in office and how they vote. In spite of this, property owner tax deductions and credits are among the longest-running tax breaks on record.
Overall, even when the real estate market is slower than average during the year leading to, during, and after the elections, things stabilize in the long run.
If you are thinking about facing the housing market around election time, the experts at The Platinum Group Realtors can help you get a credible snapshot of the current market conditions.
The number one independent firm in Colorado Springs, experts from the Platinum Group will act as your guide through the home buying or selling process, while keeping your best interests in mind. As a trusted consultant, they can knowledgeably and skillfully help you make the decisions that best fit you and your family.
For a no-obligation consultation call The Platinum Group at (719) 536-4478 Presidential elections and the real estate market