How Will the Presidential Election
Impact Real Estate? - United
States Presidential election, 2020 fact
2020 will be remembered as one of
the most challenging times of our lives. A worldwide pandemic, a recession
causing historic unemployment, and a level of social unrest perhaps never seen
before have all changed the way we live.
Only the real estate market seems
to be unaffected, as some forecasts show there may be more homes purchased this
year than last year.
As we come to the end of this tumultuous
year, as we’re preparing for perhaps the most contentious presidential election
of the century. Today, let's look at the impact past presidential election
years have had on the real estate market.
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Alright back to business…
Is there a drop-off in home sales
during a presidential election year?
BTIG, a research, and analysis
company, looked at new home sales from 1963 through 2019 and noted that in
non-presidential years, there is a -9.8% decrease in November compared to
October.
This is the normal seasonality of
the market, with a slowdown in activity that’s usually seen in fall and winter.
However, it also revealed that in
presidential election years, the typical drop increases to -15%. The report
explains why:
potential homebuyers may become
more cautious in the face of national election uncertainty.”
Are those sales lost forever?
No. BTIG determined:
“This caution is temporary, and
ultimately results in deferred sales, as the economy, jobs, interest rates, and
consumer confidence all have far more meaningful roles in the home purchase decision
than a Presidential election result in the months that follow.”
In a separate study another Chief Economist agreed that those purchases
are just delayed until after the election:
“History suggests that the slowdown
is largely concentrated in the month of November. In fact, the year after a
presidential election is the best of the four-year cycle. This suggests that
demand for new housing is not lost because of election uncertainty, rather it
gets pushed out to the following year.”
So Will it matter who is elected?
To some degree, but not in the
overall number of home sales.
consumer confidence plays a
significant role in a family’s desire to buy a home.
How might consumer confidence
impact the housing market post-election?
The analyst report covered that as well:
“A change in administration might
benefit trailing blue county housing dynamics. The re-election of President
Trump could continue to propel red county outperformance.”
Again, overall sales should not be
impacted in a significant way.
Bottom Line
If mortgage rates remain near
all-time lows, the economy continues to recover, and unemployment continues to
decrease, the real estate market should remain strong up to and past the
election.
So vote for me Chris Igoe for your
Realtor for life
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