Do Presidential Election Years Affect Real Estate?

Today marks exactly four months until the United States holds its 58th Presidential election. A myriad of things are affected as Election Day creeps ever closer, including commerce and our economy. Election years also tend to have a very distinct impact on residential real estate in the Silicon Valley and our nation as a whole.

Multiple studies have shown that uncertainty resulting from an election year influences home sales. Research conducted by in 2012 used data from the California Association of Realtors and showed that during Presidential elections, the residential real estate market ‘increased 1.5% less’ than years both preceding and immediately following elections. A 2014 analysis conducted by economists and published in the British Journal of Political Science looked at elections in 35 states between 1999 and 2006. They found that home sales declined 2/10 to 3/10 of a percent during 73 of the elections examined. They also found that home prices declined slightly during election years. Decreases in both sales and prices also tend to be higher during elections where the race is ‘neck and neck’, as this causes greater ambiguity for our nation’s economic future. In 2016, housing prices are estimated to increase 3% versus 5% in 2015.

Overall, during election years, consumers are feeling less confident in our nation’s economy, which makes them less likely to undertake significant purchases such as buying a home. Election years add to the stress and uneasiness of many Americans, the study postulates. The prospective candidates may have very different housing and mortgage policies, which could potentially affect the financial situation of many of the nation’s households. Adding to consumer uncertainty during this particular election year is how close the race is between the top Presidential candidates. History does show that once our new President is chosen and has taken office, consumer confidence does rebound.

What about mortgage rates? There is no historical evidence indicating that home loans are either positivity or negatively affected during presidential election years.

So, what does this mean for people looking to buy or sell a home? The honest answer is, it is a very personal choice. Both lending and real estate experts predict varying outcomes. claims that it is somewhat more challenging to sell a house during election years. As such, it may take longer to find a buyer, which could potentially affect the sales price. Of course, in the Silicon Valley, including highly desirable towns such as Sunnyvale and Mountain View, we are still seeing homes with multiple offers that sell above asking.

The bottom line is, our nation’s economy as well as real estate will always fluctuate. Rather than making a decision to forego buying or selling until after our new President is chosen, it is wise to get advice from a trusted advisor who can review your specific situation and help you make an informed decision.

Are you looking to buy or sell a home in 2016? The Dawn Thomas Team has a firm grasp on the Silicon Valley real estate market and we’d be more than happy to assist you in making the choice that is best for you. We invite you to contact us to schedule your complimentary consultation.