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Do I buy a red house or a blue house? Election impact on the market.

Randal Engelmann & Erik Gould

We are Randal Engelmann and Erik Gould, partners in providing exceptional customer service...

We are Randal Engelmann and Erik Gould, partners in providing exceptional customer service...

Sep 22 3 minutes read
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The election's impact on the real estate market - what you need to know.


Erik:
What does the presidential election do to the real estate market? Stay tuned.

Randal:
What does the election do to the real estate state market?

Erik:
Presidential election every four years here in the US, and it has an impact.

Randal:
It does indeed. It does indeed. Why?

Erik:
I think the biggest reason is there's a lot of uncertainty and people are getting a little preoccupied. This year, I think maybe even a little bit more than others.

Randal:
Maybe anxiety.

Erik:
Wait and ...

Randal:
Uncertainty. All of that fun stuff. And you know what? Whatever political side you're on, it seems like every presidential election, does it not, it seems to get a little bit more divisive. And we always think, "Well, especially this time," but it's just a matter of course. So we usually see a dip of about 5%. That's not a dip in prices. That's a dip in transactions. So it usually affects the market negatively by about 5% in volume. Now that's on top of ...

Erik:
Almost a 10% drop in the market in November from October.

Randal:
October. So the difference in the market between October and November is typically about 9.8%. In a presidential election year, that tips up to about a negative 15% change in the marketplace. So it does affect it. What we typically see too, what actually happens, we get through it, then we have a rebound effect.

Erik:
Yeah. And there's been some research that shows that even though during a four year cycle of presidential elections, that the November drops another 5% from the seasonal drop of October, that those buyers, they don't go away. They don't just decide not to buy. It just gets pushed off. And that the months after an election year, they actually are busy. The year after a presidential election is usually the busiest year of the four year cycle.

Randal:
And why is that? Because there's now certainty again. Plan on a slowdown between October and November, plan on an additional amount of slowdown because of the presidential election, and then that pickup. Read between the lines. What does that mean? If you have an opportunity, you're in the market to buy a home, might that be an opportunity you're looking for to be less competitive.

Erik:
November might be a great month to buy.

Randal:
Yeah. Yeah. So think about that. So there's a little bit of information for you about that presidential cycle. Feel free to drop us a line if you have any questions. And thanks for watching. Until next time, stay tuned and stay focused.

Erik:
Stay tuned and stay focused.

Randal:
Oh my god. 

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