Elections

The elections are one of the main drivers for the uncertainty our Front Range communities have been experiencing this year. It’s understandable that people are worried about the potential chaos and are distracted by the media. So, as our buyers and sellers contemplate if they should make big decisions about their properties, of course, the initial reaction is to wait on the sidelines for the turbulence to settle down.

But should you? Rather than get caught up in the candidates’ debates about real estate and your own inner-debating, let’s crunch some numbers. Past presidential elections combined with today’s market trends can give you some decision-making data:

Home Sales Might Not Slowdown for Long

Traditionally, the Front Range’s real estate market is always slower this time of year (compared to the spring). Less activity usually leads to more inventory, homes take longer to sell, and there’s less buyer competition – which is precisely what we’re experiencing now.

“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.” – Ali Wolf, Chief Economist at Zonda

When we compare national home sales in November between the years with and without a presidential election, there’s not much of a difference:

• Non-election years: Home sales drop 9.8%.
• Election years: Home sales drop 9.4%. 

Could the intensity of 2024’s election cause a steeper slowdown than in the past? Perhaps. But history shows home sales normally bounce back in December of election years and keep going up the next year. Data from the Dept. of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows us that home sales increased the following year for nine of the last eleven presidential elections! 

Read: Home values dipped. Should you be concerned?

Home Prices Usually Rise

“An election year doesn’t alter the price trend that is already happening in the market.” – Ryan Lundquist, a residential appraiser and housing analyst

Resilient – that is the best word to describe home prices along the Front Range. The pandemic, economic crisis, and such, our home values continue to increase. We may have had a year or two where appreciation stagnated or slightly dipped, but they always quickly rebound. 

Home prices climbed the following year after seven of the last eight presidential elections (source: NAR). 

The only election when prices dropped afterward was during the housing market crash – an extreme economic crisis. And during the elections, average home sales prices don’t seem impacted:

• Non-election Novembers: Sales prices grew 4.5%.
• Election Novembers: Sales prices grew 4.4%.

(Source: S&P CoreLogic Case-Shiller data 1988-2023)

Read: Our Market is Correcting – Not Imploding

Mortgage Rates May Continue Downward

“Mortgage rates are more important than elections. Homebuyers and sellers are more influenced by macroeconomic factors than political factors. What the Federal Reserve does in the weeks leading up to the election will be a more influential factor on the housing market than the election itself.” – Dr. Lisa Sturtevant, Bright MLS Chief Economist

We’re 100% in agreement here! What triggered the 2020-2022 housing frenzy? The rock-bottom interest rates. And as home loans became more expensive over the last two years, our local markets had fewer real estate transactions.

But if the economy is intricately connected to politics and real estate is tightly entangled with the economy, then so are mortgage rates. So, Freddie Mac’s data is not a surprise:

The last eleven presidential election years show us mortgage rates dropped from July to November in eight of them. 

We experienced a significant drop just last month, but the volatility of our economy is causing them to fluctuate (which is why they are currently higher). As economic conditions slowly align with the Federal Reserve’s qualifications, we’ll see more rate cuts.

But this is not a typical election cycle!

So here are a couple of trends market experts have predicted: 

• Luxury markets may temporarily stall. High-end homebuyers and sellers may pull back and see how the election results will impact businesses and the economy. 
• Post-election uncertainty may last longer this year. After the 2020 post-election events, the concerns about what will happen after November 5th may keep people distracted for longer. 

Every market has its opportunities. So, as other people are spending extra time on social media and watching TV, talk with your RE/MAX Alliance agent about whether this could be your season to make intelligent moves toward your real estate needs and goals!

Sources: National Association of REALTORS®, Keeping Current Matters, RIS Media