Will Real Estate Markets Fluctuate with the Upcoming Election?

Nationally, the real estate market tends to rise and fall at its own pace. Unlike the stock market and other economic indicators, real estate trends come and go much more slowly.

In Southern California, the housing market is even steadier, tending to hold its own much better than other metropolitan areas. However, the upcoming election cycle has already thrown more than its fair share of curve balls.

So how will that uncertainty affect your prospects for buying or selling a home in the coming months?

How Presidential Elections Drive Economic Markets

Generally, economic markets are at the mercy of the political cycle. Stocks, bonds, unemployment and other leading economic indicators can falter quickly in the face of uncertainty in the political arena.

Investment giant Merrill Lynch recently described exactly how U.S. economic markets tend to fluctuate during a presidential election year. Some facets of the economy may be in for a bumpy ride over the coming months. Historically, the S&P 500 has declined 2.8 percent during a presidential election year without an incumbent running.

Fortunately, the housing market is not so easily influenced.

How the Southern California Real Estate Market Differs from the National Scene

Year after year, the Southern California real estate market remains robust, when compared to other large markets and the nation overall. Despite the setbacks that resulted from the market crisis of 2007 and 2008, the market is healthy and strong today, and growing steadily.

Don’t expect our real estate market to suffer this year, either.

The California Association of Realtors® recently published a report detailing the ways that presidential elections influence our state’s real estate market. Since 1990, home sales during election years exceed non-election years by more than 7 percent. Prices tend to be stronger during presidential election years as well.

We expect this level of stability to continue throughout this election cycle and beyond.

Should You Buy or Sell Your Home During an Election Year?

The answer to this question may depend on the ultimate winner in November, and that candidate’s housing policy platform. Consumers are adamant that politicians must address the issue of affordable housing, and that issue is a pressing one for Californians.

Homeownership rates are down across the country. Economists attribute this trend in part to the cost of homeownership. However, the social and economic philosophies of the millennial generation are also influential. Just as they’re putting off moving away from home, getting married and having children, millennials are putting off buying their first homes.

In the Yorba Linda area, that trend hasn’t quite grabbed hold. New subdivisions, good schools and plenty of desirable amenities keep our market strong with every demographic.

Based on the historical trends, home sellers can look forward to a favorable market this election year. And because Southern California’s inventory levels are up, buyers will see more options and less competition to bid up the asking price.

When it comes to real estate, no one knows better than the Edie Israel Team how to maximize your investment. Whether you’re buying or selling a home, trust the Israel Team for all of your real estate needs.