Q: How Does a Presidential Election Affect Real Estate?
Here’s how the presidential election will impact the real estate market.
How is real estate affected by a presidential election? Studies have been done by BTIG, a research and analysis company, about how real estate has been impacted by presidential elections since 1963. They determined that during a typical year, in October and November sales drop by almost 10%. However, they essentially chalk that up to the season; there are always fewer sales during autumn and winter.
During election years, though, that number increases to 15% fewer sales. However, those sales aren’t lost. Studies show that in the year following a presidential election, home sales rise. That indicates that those who decided not to enter the real estate market in the election year simply postponed their plans.
In the year following a presidential election, home sales rise.
Don’t let the presidential election frighten you. 2020 has certainly been an unusual year with civil unrest, a pandemic, unemployment, disastrous fires, and a host of other strange developments, so I can’t completely predict what will happen. My crystal ball is in the shop, but economists are saying that interest rates should stay low throughout the next year, which is great.
Some people are worried about all the forbearance and how that will affect the market. The good news is, many people have equity in their homes right now. Inventory is also still very low, so there’s a ton of demand for real estate.
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