How the presidential election may effect the housing market

Nov 6, 20200 comments

How the Presidential Election may affect the housing market this winter and beyond…

As the year is winding down towards the holidays we find ourselves faced with yet another big decision for 2020, a decision we face every four years, the presidential election. While some many find this to be an uneasy period, history tells us we may be in better luck than one might think. Historically speaking, election years are buyers markets and can be lucrative for real estate investors. While the actual price of homes rise roughly 5% in the year leading up to election, the year of the election, and the following year, there is an opportunity to seize in the midst of the chaos. The sales of homes during election years in November as opposed to October are down 15% compared to just below 10% during non-presidential election years.

Perhaps this is a result of uncertainty about the implications of the impending election on behalf of the buyer. Whatever the case may be the market is essentially stalled to a degree as investors are waiting for the outcome of the election and to proceed accordingly. Additionally, statistics suggest that the year following a presidential election is the best year of the four-year cycle. Our contention is that this is due to an attitude of being settled into a new status quo for at least another four years, regardless of who takes or remains in office. Now many real estate investors are probably wondering if the outcome of the election will affect the real estate market. The short answer is probably not too drastically. It is fair to assume also that because we are in somewhat of a recession, unemployment is high, and mortgage rates are close to all-time lows, the real estate market and the economy as a whole will rebound in time. The economy is still in the midst of recovering from the COVID-19 crisis and unemployment is starting to decrease from all time highs.

 

Sources:

Royomartin.com “Presidents and Plywood: How the 2020 Election could affect the Housing Market”
Keepingcurrentmatters.com “How Will the Presidential Election Impact Real Estate?”

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