How Will the Election Impact Real Estate?
A worldwide pandemic, historic unemployment and social unrest have changed the way we live. Faced with these headwinds, we are moving toward perhaps the most contentious presidential election in a century. And yet the real estate market seems to be unaffected, as the latest statistics confirm that more homes may be sold this year than last year’s record-breaking total.
BTIG, a research firm, looked at home sales from 1963 to 2019 and saw that in non-presidential election years, sales dropped 9.8% from October to November. This is the normal seasonal slowdown that occurs in fall and winter.
But in presidential election years, they found that sales dropped approximately 15%, indicating that potential homebuyers may become more cautious in the face of national election uncertainty.
This caution appears to be temporary, however, as the economy, jobs, interest rates and consumer confidence have more influence on home buying decisions in the months that follow.
In a separate study, Meyers Research agreed that purchases are just delayed until after the election. In fact, they found that the year after a presidential election is the best of the four-year cycle, suggesting that demand for homes is not lost due to election uncertainty, rather it is pushed out to the following year.
Will it matter who is elected? Apparently not. Again, post-election sales appear affected more by consumer confidence and the state of the economy.
If mortgage rates remain near all-time lows, the economy continues to recover and unemployment decreases, the housing market should remain strong up to and past the election.