Presidential elections often generate concern about their impact on the real estate market. While many fear elections will cause market disruptions, the actual effects are more nuanced and generally less dramatic than anticipated.
Election years can influence the housing market through factors like uncertainty, policy expectations, and consumer confidence. During these times, people may adopt a wait-and-see approach, leading to a temporary slowdown in home sales, especially in the months leading up to the election. Historical data indicates that while there is a slight decrease in home sales in November of election years, this trend does not significantly affect the overall annual sales figures.
External factors, such as global recessions, healthcare reforms, and pandemics, have historically had a more substantial impact on the real estate market than the elections themselves. Despite these challenges, home sales often rebound the year following an election. In fact, in nine of the past eleven election cycles, home sales increased the year after the election. This pattern suggests that while elections may cause short-term hesitations, they do not lead to long-term market downturns.
Home prices tend to rise in the year after an election. In seven of the past eight election cycles, existing home sales saw price increases in the following year, with the only exception being the 2008 financial crisis. Mortgage rates also generally decrease during election years. Since 1980, rates have dropped in eight of the past eleven election cycles. This trend is consistent, especially in environments where inflation is cooling.
Most Americans’ decisions to buy or sell homes are influenced more by broader economic factors than by the outcomes of presidential elections. The real estate market operates similarly to the Apple store: temporary delays do not equate to lost sales. People might postpone their buying or selling decisions due to election-related uncertainty, but they will eventually proceed with their plans once the election results are clear.
In summary, while presidential elections may cause some short-term fluctuations in the real estate market, they do not fundamentally alter long-term trends. The market tends to stabilize and often improves in the year following an election. If you have any questions or thoughts on this topic, feel free to leave a comment or reach out directly.
I’m Scott Himelstein with the Scott Himelstein Group, your Los Angeles realtor. Thanks for watching!
