If you are thinking about investing in real estate during an election year, then you are correct.
If you’ve been reading the markets section of any business publication, you’re sure to have noted the headlines detailing the strong effect of elections on financial markets.
Does an election year have a different effect on the real estate market than in non-election years?
The simple answer is: Yes! In 2016, I say, buyers step up! Research published in the British Journal of Political Science by a Princeton economist used data from Zillow.com to look at housing sales during 73 U.S. gubernatorial elections in 35 states from 1999 to 2006. In election years, home sales declined.
It has been a rough ride in the housing market over the last decade, and data does not guarantee one single impact of elections on the real estate market. But one thing we do see is the impact of campaigns on the psychology of consumers. It can certainly be difficult to make any major purchase in an environment of uncertainty, and the campaign trail thus far in 2016 has been just that — uncertain.
However, overcoming this uncertainty may yield some great opportunities, especially for buyers — if they are willing to accept the risk of uncertainty and transact. Looking back at previous election years, 2008 was most notably defined by fear as we overcame the crippling economic events of that year, which seemingly paralyzed both buyers and sellers. Transactions slowed and financing was difficult to obtain.
As 2012 approached, markets were slowly stabilizing. And as we sit here in 2016, there is still a sentiment of underlying uncertainty even though housing prices have made a decent recovery.
As a buyer, I encourage you to consider this election year a prime opportunity to score a great deal. The market is in your favor, as uncertainty keeps market participation down overall, so sellers do not have as many buyers knocking on their door.
With that being said, sellers are more flexible towards buyers. Additionally, we continue to sit in an environment of historically low interest rates, making financing easier to access. This is something that cannot be said of 2008.
It can be challenging to tune out all of the "noise" of an election year and focus on what is best for you. Always do your due diligence, and if an opportunity fits your objectives, do not let some political attack ad, or friends and relatives turning a cold shoulder to commiserate against a candidate, be your deciding factor.
Victoria Shtainer is a veteran real estate professional with over a decade of experience working with buyers, sellers, and developers of New York property. She currently works for Compass Realty.
[The content provided through this article and www.nydailynews.com should be used for informational purposes only and is not intended to be a substitute for professional advice. Always seek the advice of a relevant professional with any questions about any real estate decision you are seeking to make.]