MINT HILL, NC – The Presidential election is just a few days away and many states have already begun early voting. There are several questions surrounding the 2020 election and one of them has to do without it will affect the real estate market.
Election years, no matter who is running, typically lead to a bit of instability, until the election has come and gone. Let’s look at what to expect with the 2020 election and the real estate market.
Sales Drop Off for November
It’s common, during an election year for sales to drop off a bit more than normal during November. According to the BTIG research report called One House, Two House, Red House, Blue House, there is a decrease of nearly 10% in sales from October to November during a Presidential election year.
However, this drop in sales is usually very temporary. It results in more in deferred sales than an actual drop in sales.
New Tax Laws Might Come into Play
Depending on the results of the election, new tax laws could have an effect on the housing market. Of course, this goes deeper than just who is elected president. Many real estate regulations and tax laws are decided at the state level, so local elections matter, too.
It’s also important to look at the individual income tax rates of the candidates. If a candidate is elected with policies to raise income taxes, it could make it harder for families to afford to buy a home. Presidential candidates with policies to lower income taxes can impact the real estate market in a much more positive way.
Consumer Confidence Matters
The 2016 election showed how important fluctuations in consumer confidence can be when it comes to the real estate market. Since the health of the economy is closely related to the housing market, consumers need to feel confident for both to thrive.
During an election, consumers are often on the fence about the economy. This is usually due to the unknown factor of who will win the Presidential election. Once the election is over, consumer confidence will follow the candidate elected and their policies to build up the economy or tear it down.
Does it Matter Who’s Elected?
Yes and no. When it comes to the overall real estate market, the candidate elected President won’t have a massive impact, good or bad. However, they can influence consumer confidence, tax laws, and other factors, which can influence the real estate market.
While some believe a change in administration could benefit some areas of the county, others believe re-electing President Trump could help other areas of the country continue to perform very well.
Overall, the total number of sales will see very little impact regardless of which candidate is elected.
A Presidential election certainly has an impact on the real estate market. However, the majority of the impact is temporary due to the uncertainty of which candidate will win. Any other changes to the real estate market have more to do with the individual candidate’s tax plans and overall policy plans than the actual election.
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