How Will the Election Impact the Real Estate Market?
Here’s how we think the election will impact our real estate market.
Between the pandemic, mass unemployment, a volatile stock market, and social unrest not seen since the ‘60s, 2020 has been one of the most challenging times of our lives. Now we’re presented with a very polarizing election.
During all of this, the real estate market has been relatively unaffected. If anything, activity has increased compared to last year. You could make an argument that the pandemic intensified our seller’s market. To get an idea of how this year’s election could impact the real estate market, we’ll look at past elections and how the market reacted.
BTIG, an equity research and analysis company, found that in non-election years, there was a 9.8% decrease in buyer activity between October and November. In election years, buyer activity drops by 15%, but we haven’t seen that yet this year. Normally, this drop occurs because people become more cautious about the potential change in office and how that could affect the market. After all, real estate reacts to the economy, jobs, interest rates, and overall consumer confidence.
This year’s been different, though, because inventory and interest rates are ridiculously low, and we don’t expect the first half of 2021 to be affected much by the election—although we might see a temporary pause due to people taking a wait-and-see approach.
"In election years, buyer activity further drops to 15%,
but we haven’t seen that yet this year."
That being said, there are still looming issues we can’t turn a blind eye to. Mortgage delinquencies, for example, are up 90% since March, and the reason we’re not seeing many short sales or foreclosures is because of the moratorium on foreclosures and the forbearance procedures that have been implemented. Regardless, we should see delayed ripple effects of this across the market.
The bottom line is that any market slowdown caused by the election will likely be temporary. History shows that if there is a change in office, the following year is usually the strongest of the four-year term, market-wise.
If you’d like to discuss the future of our market or have any real estate questions at all, don’t hesitate to reach out to us. We’re here to help.