Yahoo Finance I’m a Real Estate Professional: 8 Reasons I Advise Sellers To Lower Home Prices if Trump Wins the Election
With home prices hitting historic highs, many have wondered if we are in a housing bubble. And if so, will this election cycle burst it, or inflate it further? For those of you who are selling their home, we asked three real estate professionals what factors in a potential second Trump presidency might trigger a downward slide in the housing market and therefore urge motivated sellers to lower their home’s price.
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To be fair, each expert said that, because of the 45th president’s reputation for unpredictabilty, it’s also possible that a second Trump presidency could send home prices higher or create a seller’s market. That said, here are eight reasons they identified why sellers might want to get aggressive with their pricing if they think Trump will win in November.
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1. Market Uncertainty
It’s commonly understood that investors hate uncertainty.
Per Sara Levy-Lambert, Head of Pperations at rental management firm Awning.com, the uncertainty another Trump presidency could bring is the primary reason sellers might want to lower their home’s sales price.
“Historical trends have shown that market uncertainties often lead to a decrease in buyer confidence,” said Levy-Lambert. That means lower prices. “For example, during the 2016 election, the housing market experienced a notable slowdown as buyers adopted a wait-and-see approach. This uncertainty can lead to fewer offers and longer time on the market, compelling sellers to reduce prices to attract hesitant buyers.”
2. Potential Policy Changes
Elections have consequences. And many of them come in the form of new policies. Those could affect home prices, said Dennis Shirshikov, Finance Professor at the City University of New York and Head of Growth at Airbnb investment specialists Go Summer.
“Trump’s policies might include deregulation and tax cuts aimed at boosting the economy, but they could also lead to increased volatility in the housing market,” he said. “If sellers anticipate such volatility, lowering prices preemptively might ensure a quicker sale before any potential downturn.”
3. Trump’s Own Statements
Trump, and many other politicians, say things that they do not eventually act on. However, markets are sensitive things, and belief can often outweigh reality.
“During debates, Trump has mentioned his intentions to lower home prices,” said Daniel Rivera, President of Proactive Property Management. “If the market takes these statements seriously, there could be an anticipation of decreased home values, which could force sellers to adjust their prices proactively to stay competitive and ensure a timely sale.”
4. Economic Predictions and Consumer Confidence
Elections can significantly impact consumer confidence, said Riviera. That can be both positive or negative.
“If a Trump victory is perceived as potentially leading to economic instability or if there are concerns about future economic policies, buyers may become more conservative in their spending,” he said. “Lowering home prices could make properties more attractive in a market where buyers are more budget-conscious.”
5. Historical Market Reactions
Elections have historically been inflection points, ones which markets react to, correctly or incorrectly.
“In previous elections, the real estate market has seen fluctuations based on the elected administration’s policies and market outlook,” said Riviera. “Sellers might lower prices to preempt a potential downturn if the market perceives a Trump win as a negative indicator for the housing sector.”
6. Interest Rate Fluctuations
Interest rates, i.e., the cost of borrowing money, have a huge role in home prices.
“A Trump victory could influence the Federal Reserve’s decisions on interest rates,” said Shirshikov. “If there’s speculation that rates might rise to counterbalance economic policies, buyers could be deterred by higher borrowing costs. Sellers might need to lower prices to make homes more attractive in a higher interest rate environment.”
7. Buyer’s Market Transition
If the housing market begins shifting toward a buyer’s market in anticipation of a Trump presidency, sellers might want to act early, said Shirshikov. “Sellers who lower their prices early might benefit from higher interest while other sellers hold out,” he said. “By anticipating the shift, proactive sellers can capture buyer attention and close deals faster. In past market transitions, early movers who adjusted their pricing strategies often fared better than those who waited too long.”
8. Economic Performance Concerns
Many factors go into housing prices and consumer confidence. If concerns over those factors grow large enough, sellers might need to react, said Shirshikov. “If buyers are worried about job security or economic stability, they may be less willing to pay premium prices. Lowering home prices can alleviate these concerns and attract more cautious buyers.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: I’m a Real Estate Professional: 8 Reasons I Advise Sellers To Lower Home Prices if Trump Wins the Election
