As we approach the 2024 election, you might wonder how it will impact the real estate market. Here’s a brief explanation.
Temporary Slowdown in Election Years
During election years, there tends to be a temporary slowdown in real estate activity. Every autumn, home transactions generally decrease slightly due to seasonal trends. However, data from BTIG shows that in election years, housing transactions tend to decline more significantly in the month leading up to the election.
Why Are People Delaying Transactions?
The primary reason is uncertainty. Many consumers prefer to wait for the election results before making significant decisions or purchases. This pattern is particularly evident in the housing market this year. A recent survey by Redfin found that 23% of first-time homebuyers are postponing their purchases until after the election, highlighting the uncertainty caused by the electoral process.
Recovery in Home Sales Post-Election
Fortunately, these delayed transactions do not disappear entirely. Statistics indicate that home sales typically rebound after elections. In fact, records show that 82% of the time, home sales increase in the year following an election.
Once the election is over, uncertainties about future prospects diminish, allowing both buyers and sellers to make more confident decisions, which naturally leads to increased housing transactions.
Expectations for 2025
If past patterns continue, it is likely that more homes will be sold next year. Recent forecasts suggest that a total of 4.6 million homes will be sold in the market this year, with that number increasing to 5.2 million next year. This aligns with the anticipated recovery of the housing market following the election.
Thus, even if the market seems to be sluggish now, it reflects a temporary decline rather than a long-term downturn. Once uncertainties are resolved, we can expect to see buyers and sellers return to the market.
Conclusion
The slowdown in the real estate market during election years is temporary. Despite this short pause, transactions do not come to a complete halt. There is a tendency for housing transactions to increase after the election, and current forecasts suggest the same will happen in 2025. If you’re waiting for a clearer situation, it’s reasonable to expect the market to regain its vibrancy in the coming months.
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