In honor of the most recent presidential debate, it has my husband and me thinking about the upcoming election and the housing market this year. There’s no doubt that this has been one of the most hectic and somewhat exciting election years that truly leaves you feeling a bit uneasy. With that said, it’s had a bit of a reaction not only from American citizens but a reaction from the real estate market. The local headlines are constantly talking of the polls and what the candidates are saying now and the prices of your homes are just not on the mind. So if you have questions, well you're not alone. We will do our best to answer some of them.
Question 1: How exactly is real estate affected?
Well, it’s actually a simple answer. The elections will affect the price of homes with a lower percentage because of increase in value. For example; in the California market, you will see that house prices will usually rise 1.5% less during an election year versus not at all and the year following usually sees 0.8%. So it doesn’t seem like too much but keep in mind that the difference percent wise can add up over a time. With that in mind, the potential cost that homeowners see could be thousands of dollars in value lost.
Question 2: Why will the election hurt the price of my home?
You may be reading this and wondering “This seems odd to me that it’s even a subject, why is an election going to affect what my home is worth?” Think about it on these terms. For many of us, an election can be a bit stressful and leave us a little uneasy. When people are feeling that way, they don’t exactly feel the desire to make such a large purchase in what feels like very uncertain times. Considering the outcome of an election has the ability to affect your finances, many will not want to risk the investment of a new home until the next President takes offices. With each new candidate comes a new housing and mortgage policy that have potential to affect a buyer in different ways. These all become a risk that homebuyers just simply want to wait it out.
Question 3: So what does this mean for the sale of my home?
According to realtytoday.com “Realtytoday.com states that it is generally harder to sell homes during election years; therefore, it may take longer to find a buyer, and the sales price may be slightly lower than anticipated. For sellers, it may be more beneficial to list your home for sale the year before or the year after an election, if possible. Selling a little sooner or waiting a little longer could mean that the value of the home would be slightly higher, creating a larger payout.”