How Will The Presidential Election Impact The Real Estate Market
Dated: October 4 2020
Here’s a closer look at how the upcoming election will affect real estate.
2020 will be remembered as one of the most challenging years of our lives. A global pandemic, a recession that causes historic unemployment, and a heightened level of social unrest have all changed the way we live our lives. Only the real estate market seems to be unaffected as recent forecasts show that more homes will be purchased this year than last year.
As we come to the end of this tumultuous year, we’re bracing for what may be the most contentious presidential election of the century. It’s important that we look at the impact this election has on real estate. We’ll do that by answering three questions:
1. Is there a drop off in home sales during an election year? BTIG, a research and analysis firm, looked at new home sales from 1963 to 2019 in their report titled “One house, Two House, Red House, Blue House.”
They noted that in non-presidential years, there is an average decrease of 9.8% from October to November sales. This is the normal seasonality of the market. However, the data also revealed that during election years, that decrease becomes a much steeper 15%. The report states that “this may indicate that potential homebuyers may become even more cautious in the face of national election uncertainty.”
2. Are those sales lost forever? The answer is no, BTIG determined. They said, “Caution is temporary, and ultimately results in deferred sales because the economy, jobs, interest rates, and consumer confidence all have far more meaningful roles in the purchasing decision than a presidential election.”
In a separate study, Chief Economist Ali Wolf concluded that purchases are just being delayed until after the election and states, “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 a four-year cycle.”
This suggests that demand for new homes is not lost because of election uncertainty; it just gets pushed out to the following year.
3. Will it matter who’s elected? To some degree, but not in the overall number of home sales. As mentioned previously, consumer confidence plays a significant role in a family’s desire to buy a home. The BTIG report states, “A change in administration might benefit trailing blue county housing dynamics. The reelection of President Trump could continue to propel red county outperformance.”
The 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 beyond the election.
If you have any other questions for me about the market or about real estate in general, don’t hesitate to reach out via phone or email today. I look forward to hearing from you.
This Blog courtesy of Will Cook, WILL COOK GROUP | Keller Williams Luxury Homes, Palm Springs, CA | DRE #01879277
Ranked in the top 1% of all agents valley wide and named one of the Palm Springs Life Top Realtors for 2019 and 2020, Will is an Associate Broker/Team Leader of the WILL COOK GROUP with Keller William....
WILL COOK GROUP | Keller Williams Luxury Homes | DRE# 01879277
435 N. Palm Canyon
Palm Springs, CA 92262 760-565-5714
Should you require assistance in navigating our website or searching for real estate, please contact our offices at 760-565-5714.
The information being provided by SoCalMLS, CRISNet Regional MLS, CARETS is for the consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumer may be interested in purchasing. Any information relating to real estate for sale referenced on this web site comes from the Internet Data Exchange (IDX) program of the SoCalMLS, CRISNet Regional MLS, CARETS. ZipRealty, Inc. is not a Multiple Listing Service (MLS), nor does it offer MLS
access. This website is a service of ZipRealty, Inc., a broker participant of SoCalMLS, CRISNet Regional MLS, CARETS. This web site may reference real estate listing(s) held by a brokerage firm other than the broker and/or agent who owns this web site.
The accuracy of all information, regardless of source, including but not limited to open house information, square footages and lot sizes, is deemed reliable but not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals. The data contained herein is copyrighted by SoCalMLS, CRISNet Regional MLS, CARETS and is protected by all applicable copyright laws. Any unauthorized dissemination of this information is in violation of copyright laws and is strictly prohibited.
Copyright 2020 SoCalMLS, CRISNet Regional MLS, CARETS. All rights reserved. Certain information contained herein is derived from information which is the licensed property of, and copyrighted by, SoCalMLS Inc
Data last updated: November 25, 2020 5:04 AM UTC
If a listing displays "Short Sale/Subject to Lender Approval" then that listing has been identified by the seller and the listing broker as a "Short sale." This means that, at the listed price, the proceeds from the sale may not be adequate to pay all liens and costs of sale. Any offer made that does not fully cover the existing amount(s) owed to the lienholder(s) plus the costs of sale could be subject to lienholder approval, which approval may be exercised at the sole and exclusive discretion of the lienholder(s).