Election Day is here, and it’s natural to wonder how the results might affect the real estate market. Whether you’re considering buying, selling, or just curious, the question often arises: does an election really impact home prices?
Historically, the answer has shown a consistent trend. My friend Ryan Lundquist over at the Sacramento Appraisal Blog has shared a fantastic visual that illustrates what’s been happening in the Sacramento market since 1975. The green sections indicate election periods, with white periods showing what followed. The trend is clear—whatever the market was doing before the election usually continued afterward. If prices were rising before an election, they generally kept rising; if prices were dipping, that trend tended to persist.
It’s not that elections don’t affect the housing market at all—they certainly can influence policies that may eventually affect the market. However, in the immediate sense, larger economic forces play a more significant role. For instance, interest rates, inflation, and even global events often exert a stronger influence than election outcomes.
Let’s look at recent history for context. In the early 2000s, an election came amid a housing boom driven by low interest rates and easy credit. The 2008 election coincided with a financial crisis that had an enormous impact on housing—but this was more due to the financial climate than the election itself. The 2016 and 2020 elections similarly saw the market continue along its previous path. In 2020, despite the uncertainty surrounding the COVID-19 pandemic, the housing market surged thanks to low interest rates and shifting home preferences.
Today, as we face higher interest rates, we’re seeing a bit of a standoff with price fluctuations as the market adjusts to new conditions. Based on past trends, it’s likely that the back-and-forth in home prices may continue after this election, too. So, while elections have an effect on market psychology and can create some pause, they’re often just one of many factors in a complex market landscape.
As we move forward, interest rates and other economic factors will continue to play the biggest role in shaping the market. In the meantime, if you have questions or want to discuss your own real estate goals, feel free to reach out!
Posted by Patrick Hake on
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