Ah yes, election season is upon us once more - that magical time when political pundits start frothing at the mouth, desperately trying to convince you their candidate won't totally nuke the economy. And of course, few sectors feel those ripple effects quite like the cut-throat real estate game.
As we careen toward the 2024 presidential showdown, potential homebuyers and sellers are sweating bullets over how the political tides could pummel their investments and dictate market dynamics. Because let's be honest - the real estate arena acts as a demented stock ticker gauging the broader economy's stability. And presidential elections have historically injected just the right amount of sheer chaos and uncertainty to really make those listing prices start yo-yoing.
Below we'll scan the current housing landscape, study how the last election cycle impacted the market milieu, and gaze into the crystal ball to dish on how the White House's next occupant could validate your real estate aspirations...or render them utterly obsolete.
The State of Housing in 2024
The real estate world is feeling pretty dazed and confused heading into this election cycle. After the rollercoaster ride of COVID obliterating everything in its path, the market is stumbling through this transition period all slugged in the jaw.
On one hand, mortgage rates have positively skyrocketed - hovering around 7.09% on a 30-year fixed just since May, a far cry from the sub-3% pandemic-era lows. Buyers are straight up recoiling at those brutal borrowing costs driven by the Fed's desperate battle against stubbornly high 8% inflation.
But on the other hand, despite those astronomical rates, home prices keep right on soaring like a drunk rocket, dragging that median existing home price upwards of $387K in November. Don't even get me started about the ongoing housing supply woes either, a shortage crisis years in the making with inventory still languishing below historical norms.
Of course, sales activity mirrors that chaos. Existing home sales did find their footing with some modest 0.8% growth in November, but still trail their year-ago pace by 7.3% - a chilly sign of the frozen buyer sentiment out there.
Last Election's Housing Haymaker
To properly assess this upcoming shitshow, we gotta reflect on how the last presidential election went down in 2020. Thanks to the raging COVID pandemic, real estate got hammered in a very different (but no less devastating) way.
While mortgage rates bottomed out into the sub-3% range thanks to easy Fed money, the pandemic-bred stay-at-home orders sparked an insatiable frenzy for more living space and multigenerational homes that could accommodate remote work and learning. Home prices went supernova and bidding war horror stories were commonplace amidst historically low inventory levels. It was a true sellers' paradise...
...Until it wasn't. That blissful sugar high inevitably wore off, and buyers have since been forced to confront the harsh come-down of much, MUCH higher borrowing costs in 2024. A lot of the present "mortgage rate lock-in effect" of homeowners unwilling to upgrade is rooted in reluctance to take on these exorbitant modern mortgage payments.
So while 2020's abominable market conditions were dictated by the pandemic's unprecedented domino effect, 2024's vicious cycle of weak buyer demand amidst higher costs and inflation is shaping up as its own formidable beast.
How This Election Could Pummel Home Prices
Since the Biden administration has spent its first term hyper-focused on wrangling housing costs as a core inflation driver, their policy proposals are heavily geared towards increased supply-side solutions to ease affordability woes.
Good ol' Trump, on the other hand, would likely double down on his previous playbook of prioritizing economic growth through deregulation - a move that could boost market activity in the short-term but potentially breed increased volatility down the line.
And if a wily outsider third-party candidate somehow crashes the party by striking electoral gold? Well, all bets are off. Major shakeup policies offering some innovative housing solutions could hit the scene... but so could destabilizing market uncertainty while the powers that be figure out their next move.
Buyer's Remorse, Anyone?
In fairness, though, whoever's sworn in as the next Commander-in-Chief will merely exacerbate the volatility already brewing in real estate. The deciding factors like economic growth, inflation, interest rates, and market fundamentals play a FAR more significant role than any one administration's policies.
But for you burnouts still hellbent on navigating these choppy waters, staying relentlessly informed and heeding tips from the salty real estate vets who've seen their share of election cycles is basically your only chance at avoiding total financial immolation.
So hunker down, deploy patience and risk mitigation strategies, and maybe - just maybe - you'll manage to leverage that crapshoot of a real estate deal you've been coveting amidst the backdrop of national electoral pandemonium.
At the very least, you'll hopefully emerge with some fresh coping mechanisms for staring down the anxiety-inducing prospects of your housing future being held hostage by the whims of our republic's next four-year tenants.
