From a national point of view and traditionally our market, presidential election years are always rough in the financial world. Stock markets do not like uncertainty. Studies have shown that this uncertainty affects not only the financial markets but home sales as well. Consumer confidence is lower during election years and this translates into slower real estate activity and pricing. When the election polls show a close election, the uncertainty rises and the result is almost stagnation in home sales.
Buying or selling a home is one of the largest financial transactions that most people do in their lifetime. They don’t want to make a mistake. The two major US political parties often espouse very different views on financial issues, government spending and monetary policy. Consumers find this debate unsettling as they try to determine the various proposals and their potential impact on their jobs and families. They are less likely to want to make a major financial decision until the election is over: the closer the polls between the candidates the greater this sense of uncertainty, and the slower the real estate market. History has proven that once the election is decided, consumer confidence rebounds and the pace picks up.
So how does this affect our market if you must buy or sell a home? There are always people in the real estate market. Job relocations, down-sizing, expanding families will always create the need to buy or sell. Buyers tend to see lower interest rates and lower housing prices, which can be very attractive, even if the inventory is less. Sellers can benefit from the lack of inventory as well. While the sales price might not be as high during an election year, a home that is less-than-perfect, could sell for more than it might with a larger pool to draw from.
In regards to our market, I keep waiting for the traditional election year slow down, but it refuses to show itself. Real estate continues to be stronger than ever. Through September inventory continues to be significantly lower. A normal September has around 1200 homes on the market. At the end of last month we only had 635. In addition, September was the highest selling month of 2016. The average sale price this year is just under $248k. In other words, our market does not care about the election!
Election years cause uncertainty for everyone. The housing market always sees a slow down during this time. Every market presents its own challenges and opportunities and if you are considering a home sale or purchase, understanding the election year effect on the US Housing Market can help you determine if it’s the right time for you to make a move. I am hear to help. Lets talk. 509.308.2102
