Eric and Lili Chang have been looking for about a year to buy a home in the San Francisco Bay Area, and Eric said he hopes they find a home before the election. “The election is compelling us to buy,” he said. “Maybe after the election, interest rates will rise because (Federal Reserve Chairman Alan) Greenspan won’t feel political pressure to keep them low.”
While industry statistics don’t provide a clear link between presidential elections and housing market performance, consumers and experts are of different minds on whether the post-election political landscape will boost or burden the bullish real estate industry.
Steve and Patricia Shaw, who moved to South Carolina about a year ago, are trying to sell their home. Steve said he’s heard “both sides” of whether the election could impact the housing market.
“Some people say with interest rates possibly going up, (the election) will affect the housing market and others say it won’t,” he said. “I think if Bush is elected, (rates) will either surge or stay the same. If Kerry is elected, I think the housing market will decline. I guess I really don’t know enough about it either way.” He said he hopes the market stays strong long enough to sell their home, though if the market slows it may help them when they are ready to buy a new home.
Some real estate agents have heard consumers express reservations about whether the political election could chill the housing market. Janis Hott, an Ohio Realtor, said, “Many of (my clients) have made comments about the interest rate going up after the election, and see that as an impetus to find a home or get their (home) sold.”
A Realtor for 25 years, Hott said she typically sees more activity in the housing market during a presidential election year. “I have always found election years to be somewhat better, especially in the summer and fall.” She said, “I have always found election years to be somewhat better, especially in the summer and fall,” and she expects the market to slow down a bit, with higher interest rates, after the election.
Meanwhile, Gregory Pawlik, a politically active commercial Realtor with Coldwell Banker in Southern California, has said there is a possibility that interest rates will rise more gradually under a Republican administration, and more rapidly with a Democratic administration.
Anthony Rondeau, vice president of Select Financial Mortgage, said in an Internet announcement that he spoke with prospective home buyers who expressed their worries “regarding the upcoming presidential election and the uncertainty of activities in the Middle East.” His response: “I have found that you cannot predict what will happen and you should make plans for your future regardless of those outcomes.”
Consumer confidence has a lot to do with the housing market, said Mary Pope-Handy, a Realtor with Intero Real Estate Services in Los Gatos, Calif., and some of her clients have expressed worries that interest rates could rise after the election. But she doesn’t share their fear.
November is generally a slow month for real estate sales, regardless of whether it’s a presidential election year or not, she said. “I haven’t noticed a change between election years and non-election years,” Pope-Handy said.
“If we don’t have another terrorist attack, and if our local economy continues to improve (albeit slightly), then our ongoing situation here of more demand than supply should continue to cause our prices to rise somewhat and for people to want to buy a first or move-up home. A lot of our local housing (in Silicon Valley) is influenced by our very local economy and consumer confidence. “The confidence level of the public after the election – whichever way it goes,” is a key to the market’s performance, she said.
The National Association of Realtors hasn’t found a direct connection between presidential election years and housing-market performance, said Walt Molony, an association spokesman. “Purchase decisions appear to be made largely on market conditions and personal needs and desires. Elections don’t appear to have a significant impact on either,” he said.
Economic forces, rather than political elections, are the true drivers in the near-term performance of the housing market, said Chris Cagan, director of research and analytics at First American Real Estate Solutions, an Anaheim, Calif., company that collects and delivers real estate data. Interest rates, home prices, home sales and affordability are driven more by economic factors than political forces, he said. “I don’t see the presidential election – whoever is elected – having major impact on home prices or home sales.
While Cagan said that interest rates are likely to rise, “The membership of the (Federal Reserve) will be the same. The economic powers will be the same.”
But Cagan said there is one election scenario that could potentially harm the housing market: A contested election. “That to me would have the most impact on the economy and on society,” he said. “That, to me, is the one ‘wild card.’ Personally, I hope the election is decided by a substantial margin.”
William Ktsanes of RealFacts, a Novato, Calif.-based company that tracks multifamily housing statistics, said he hasn’t found a direct correlation between the health of the housing market and presidential elections, though the handling of the budget deficit could play into the real estate market’s performance.
Inman News staff writer Rebecca Hurwitz contributed to this article.
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