Carlsbad, CA— This morning, Scott Murphy emailed over a story from Yahoo which asserts that it is more difficult to sell a home during an election year.
The last two election cycles would certainly uphold this thesis, when we consider the relatively dismal real estate markets in 2008 and 2012. How much San Diego real estate prices hinged on election year uncertainty versus a generally crappy economy is hard to tell.
San Diego homes for sale were rocking in 2004, when home sellers and buyers were chasing prices to the stratosphere. This was also an election year, but that had little to do with the easy money that was literally being thrown by mortgage lenders (via Fannie Mae and Freddie Mac) to buyers regardless of qualifications.
I recall Bank of America offering stated income loans to our real estate clients who had stellar W2’s and long-term qualifying income. In a few cases, we closed in less than 10 days.
The authors of this article reference a paper published last year using data from Zillow that looked at housing sales during 73 U.S. gubernatorial elections in 35 states from 1999 to 2006. They found that in election years, home sales declined between two and three tenths of a percent.
Is this enough to worry about? Perhaps it is.
In another study conducted by Movoto in 2012,
“Real estate site Movoto uncovered a similar effect using data from the California Realtors Association to look at presidential elections. During election years, the analysis found, home prices rose by just 4.5%, while they rose by 6% and 5.3%, respectively, in the years before and after an election.”
In both studies, it seems election years are unsettling for many buyers, who are seeking more certainty in their purchase–and feel more comfortable making a home purchase after elections are settled.
And so we wonder, if one is thinking of selling their Carlsbad home, is this the season to do so?
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