“How Do Elections Affect Home Sales?”
As the presidential election approaches, it’s common to hear concerns about its impact on the housing market. From potential buyers hesitating to move to real estate agents fielding questions about market stability, election years often bring a heightened sense of uncertainty. But what does the data really say?
Presidential Elections: Myths vs. Market Realities
1) Seasonal Declines and Elections: Contrary to popular belief, the seasonal decline in home sales during election years is no more significant than in non-election years. Over the past 35 years, data shows that the typical seasonal drop in home sales is driven more by the economy than by the election itself.
2) Economic Conditions Matter More: The biggest factor in home sales trends isn’t the election; it’s the overall health of the economy. During periods of economic downturn or recession, home sales tend to decline more sharply, regardless of the election cycle.
3) Personal Circumstances Over Politics: While political uncertainty may influence consumer sentiment, most homebuyers are driven by personal life events rather than political ones. Decisions to buy or sell a home are typically based on factors like job changes, family needs, or financial readiness.
4) The Data Speaks: In election years, new home sales decline by an average of 10%, and existing home sales by 19%. These figures are actually slightly better than the average declines seen in non-election years. Historical data shows that presidential elections have minimal impact on the housing market.
Key Takeaways:
1) Ignore the Noise: Political discourse may be loud, but it rarely changes homebuying behavior.
2) Focus on the Economy: A weak economy, not elections, is the primary driver of greater-than-expected declines in home sales.
3) Personal Decisions Reign Supreme: Life events, not politics, are what typically drive home purchase decisions.
As we move closer to the election, it’s important to stay grounded in data and not be swayed by anecdotal concerns. The housing market is resilient, and while elections bring a lot of noise, the underlying fundamentals of real estate remain driven by economic factors and personal circumstances.
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