Yahoo Finance 7 Key Things To Consider When Buying a Home Around Election Time
Presidential elections can have a deep impact in many areas, from the cost of living to consumer behavior. But how does the election impact the housing market? If you are thinking about buying a home between now and November, you may be surprised about how real estate is affected by the pending election.
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GOBankingRates asked real estate experts from across the country to provide insight into whether potential home buyers should be concerned with the impact of the Nov. 5 election and how it may affect their purchase. Here are seven key things the experts said to consider when you’re buying a home around election time.
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Buyers and Sellers May Be Affected by a Wait and See Approach
Erin Hybart, a real estate agent in Zachary, Louisiana, and ADU and tiny house enthusiast at ReErin.com, said potential buyers and sellers may be affected by people wanting to wait and see what the outcome of the election will be.
She explained, “Many buyers and sellers are waiting to see how the election plays out before making a move. This trend is more common among those who have the flexibility to choose when to buy rather than those who need to move due to time-sensitive circumstances.”
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Changes in Buyer and Seller Behavior
Colten Claus, an associate broker at 8z Real Estate, also noted that elections can affect buyer and seller behavior. He explained, “Buyer and seller behavior can shift during an election year. Some sellers might hold off listing their homes, leading to lower inventory and potentially higher prices. Conversely, a post-election period might see a surge in listings and more negotiating power for buyers.”
He suggested that the risk-averse consider waiting to buy until after the election, when the market has had a chance to stabilize. “Election periods often bring a degree of uncertainty to the market. Potential changes in policies related to housing, taxes and the economy can make buyers and sellers hesitant.”
More Negotiating Power for Cash Buyers
While buyers may have to continue to deal with high interest rates, sellers are also having to contend with a cooler market.
Hybart said, “In the local market, motivated sellers are having to negotiate more, especially with the current high interest rates making borrowing more expensive. If you’re a cash buyer, now might be a prime opportunity to score some bargains and take advantage of the increased negotiating power that comes with a slower market.”
Interest Rate Changes
While it is difficult to predict whether interest rates will be impacted in the months leading up to the election, the outcome has had some significance in the past.
Claus said, “Historically, election outcomes can influence interest rates. While it’s hard to predict exact changes, elections can affect the Federal Reserve’s decisions on rate adjustments. Monitoring economic forecasts and consulting with financial advisors can help you decide whether to lock in a rate now or wait.”
Changes to Housing Policies
Potential buyers should be aware of how an election may change housing policies, which can have a substantial impact.
“Elections can lead to changes in housing policies, which may impact tax benefits, mortgage interest deductions and affordable housing initiatives,” Claus said. “Understanding the platforms of the candidates can provide insights into potential policy shifts that might affect your purchase.”
Local Market Dynamics
“Real estate is highly localized,” Claus said. “While national trends matter, understanding your local market’s dynamics is crucial. Speak with a local real estate expert to get insights into whether now is a good time to buy in your area.”
Even with a pending election, buyers still need to pay attention to their local markets.
Purchase Cost and Opportunity Cost
Nikki Beauchamp, NYRS, an associate broker with Sotheby’s International Realty in New York, said buyers should still focus on the cost of the property. She explained, “The primary consideration for a buyer should be to evaluate their actual cost of purchasing, as well as the opportunity cost.”
She suggested that if the property that meets your needs and wants is available now, you should consider how interest rates potentially decreasing would affect competition in the market — and whether there’s a possibility that a less competitive market in the future would increase your negotiating power.
Beauchamp also noted that buyers should consider their individual situation, such as whether they are renting, currently own or need to sell.
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This article originally appeared on GOBankingRates.com: 7 Key Things To Consider When Buying a Home Around Election Time
