A primer in election behavior with home buyers and sellers
A presidential election is always a major event in our country. There is no doubt that consumers are waiting and wondering how the election will affect home prices and the real estate market overall. It is not unusual for consumer confidence to waver in an election year and this year is no different.
Some buyers and sellers are waiting to take action because they are concerned that our real estate market is fragile and that it could boom or bust based solely on who wins the election. Fear is a big driver in this election with strong messages from both sides which is causing some voters to stop spending. Therefore, many areas are seeing a slight slowdown in their local real estate market.
Waiting is by far the biggest by-product of any election. Buyers and sellers wait to see what is happening and patiently wait to see who gets elected before making any big moves. Traditionally in an election where a candidate is a returning president (an incumbent) there seems to be more confidence because there is less that is unknown about that candidate and how they lead. You have already lived with the decisions of that president so there is less fear. If the candidate(s) are unknown and/or their track record is questionable then there will be more fear and less confidence.
That is certainly what we are seeing right now. The fact that the candidates have such a polarizing affect is increasing that fear of the unknown.
The result is that in some markets we are noticing that buyers are waiting to see what happens in the election before they buy. If you have buyers who are taking action by NOT taking action and you are in a market that seems to have reached a lull, I recommend having a conversation with your buyers about the benefits of buying now. Sellers may have put their homes on the market hoping for a quick sale, but if that is not forthcoming and they plan on moving, this might prove to be an opportunity for homebuyers. In addition, the interest rates are still near historic lows, prices are expected to go up as pent up demand from population increases without enough corresponding new construction will not be satiated for some time.
Remember, no matter who is elected, our government is set up with a system of checks and balances. A revolution is not imminent as our executive branch solely does not have that power.
So before your buyers sit on the fence too long remind them that this is an excellent moment in the market to buy.