Election Years are Bad for Home Sales
Normally I work to keep this blog positive, but people who know me know that I’m guilty of being bluntly honest. (Way too blunt at times.)
2016 is a Presidential election year. No matter who you support (or don’t), which party you love (or despise), and no matter your thoughts about any political topic, home sellers must understand that election years are bad for business.
The Journal of Political Science, a British publication, published an academic research paper. This paper studied the effects of election years on home sales using data from Zillow. Academic researchers found what real estate brokers already know; home sales generally decline by 2/10% to 3/10% during election years. In close races where the winner received less than 55% of the popular vote, home sales declined further to 1/3% to 1/2%. The researchers also noted price decreases during election years.
A separate study by Movoto using California Realtors Association data found similar results. California prices during election years rose by only 4.5% instead of the 6.0% and 5.3% gains in the year preceding and after the election. (If only Wisconsin could fret over 4.5% yearly home valuation gains!)
Why? The answer is simple and universal; all markets abhor uncertainty. Election years represent gross amounts of uncertainty. Individuals also abhor uncertainty; that same study also found that buyers delayed their entry into the housing market to the extent that the buyer thought the election results would affect them personally.
What’s a seller to do? Instead of worrying over what you cannot affect, the best action is to plan. Begin with a solid real estate broker in your corner. Find someone who understands the need to plan and move methodically. Demand an agent who doesn’t take their own photos with a camera in their phone, but who instead uses a professional real estate photographer. Seek out somebody who has connections in the trades and in the staging world.
While I can’t stop you being victimized by politicians and bad policy, your home sale doesn’t have to be victimized by an election year! Please tell me how I can help you make your sale a reality.
Source: “The Buyer and the Ballot” by Adam Bonislawski. Published in page M12 of the print edition of the Wall Street Journal on 09/11/2015.