Jennifer Sturgeon
It seems like everywhere you turn – it’s all about the elections. The primary season is in full swing and we are just eight months out from what could be one of the most contested presidential elections in recent history.
Changes in The White House or more of the same could have a significant impact as presidential races by nature cause uncertainty in the stock market and the housing market. But the question remains: Will that have an effect on the housing market and home prices?
Some may get nervous and decide they want to get their house on the market now to be ahead of any turbulence that often comes with elections. Others might decide to wait it out and see if there will be better economic times ahead. But based on past history, there is no need to panic. If you look at how the first two months of 2024 played out, one would say we are on the right track. January and February saw modest gains, with the East Valley cities performing slightly better than more traditional luxury sectors such as Scottsdale and Paradise Valley.
The main reason for that is the plethora of new listings which have entered the market in the $2 million and up range in these cities. Even though we have seen improvements in buyer motivation and activity, when there is an abundance of inventory, something has to give… and usually that means price reductions or more negotiations for sellers who want that Sold sign in front of their home. Not so for Mesa, Gilbert, and Chandler, as all indications right now point to more continued growth in the second quarter with more inventory to choose from for buyers, but still slightly favoring sellers in most price points.
One thing that does affect markets no matter what the time of year is uncertainty. And elections or not, there is a slight sense of apprehension lately, brought on by the lack of interest rate reductions, which has been anticipated but has not materialized just yet.
However, keep in mind that the best deals are made in times of uncertainty – which is right now! And when those interest rates do start to go down again, that will increase demand and put upward pressure on home prices once again.
According to Tina Tambour, senior housing analyst for The Cromford Report, those who are planning on purchasing a home to stay in for a few years should be doing just fine; it is the fix-and-flip model where a home is only held for six months or less who may have reason to worry. It’s also why a company like Open Door lost nearly $91 million in the fourth quarter of 2023.
Her advice? “Ignore the election. If you want to sell, then look at seasonality,” she recommends, stating that the seasonality of home selling and buying in the Valley is much more important than the effect an election year may have.
The most likely group of home buyers that will give a pause during an election year, Tina said, is those in the upper-end luxury market. The reason for this is that at east in the last four election cycles, the stock market has gone up after the election, and many want to wait for that expected rise before making a buying decision.
So, while there may be a small pause in buying and selling activity just a month or two before a major election, most economists agree that election outcomes and who’s sitting in the Oval Office will have very little impact on financial markets, including the housing sector.
Instead, economists argue other economic factors like an impending war, interest rates, and inflation trends will have a bigger impact than election results and any sales that are lost in November of an election year can often get back on track in December and the coming months.
Christine Anthony and Jennifer Sturgeon are licensed real estate agents with Russ Lyon Sotheby’s International Realty. Combined, the duo has more than 25 years helping clients buy and sell homes in The Valley of the Sun. They are both longtime residents of Northeast Mesa, where they have raised families and become an integral part of the community. For more information, please call (480) 200-0972 or email canthonyre@gmail.com.