May 24, 2016 by Jeff Lowen
What happens once every four years? Yes, it’s leap year, but this time as we hear people question what effect the Presidential election might have on the national housing market, our concern is what can we expect happen to real estate industry as a result of a new president.. Let’s take a look at what is currently taking place. The New York Times ran an article earlier this week where they explained:
“A growing body of research shows that during presidential election years — particularly ones like this when there is such uncertainty about the nation’s future — industry becomes almost paralyzed. A look at the last several dozen election cycles shows that during the final year of a presidential term, big corporate investments are routinely postponed, and big deals are put on the back burner.
The research is even more persuasive on the final year of an eight-year presidential term, when a new candidate inevitably will become president.”
We are seeing this take form in the latest economic numbers. However, will this lead to a slowdown in the housing market? Not according to Fannie Mae, Freddie Mac or the National Association of Realtors.
The Impact on Housing Throughout 2016
Let’s look at what has happened and what is projected to happen by these three major entities.
“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”
“Recent data darkened the growth outlook for the first quarter of 2016. However, despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”
“Consumers and businesses showed caution at the end of the first quarter…(but) Home sales are expected to pick up heading into the spring season amid the backdrop of declining mortgage rates, rising pending home sales and purchase mortgage applications, and continued easing of lending standards on residential mortgage loans.”
The moral of the story…
There are always at least two sides to any story. In this case, there’s research that shows, at least what the NY Times claims, of evidence that supports a stand still in election years. Then, there are those organizations in the industry, the Freddies and Fannies and let’s not forget the National Association of Realtors… That contradict this ‘research’ with evidence of their own. Who’s right, who’s not? Good question.
I believe the truth is this: What are your plans this year? Stay put? Job change? Move closer to family? Upsize? Downsize? Watch it all go by? What’s right for you is your decision. Even during this election year, the desire may be to achieve the American Dream as being greater than the fear of uncertainty of the next president… Even if it’s a Donald, a Hillary or a Bernie. 🙂
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