ON THE MARKET: The election's impact on real estate markets

All right, welcome back, everybody. Election Day and voting results don't just impact who's in the Capitol helping to pass laws. No, it can also have an impact on things like the stock market and real estate market. Our expert realtor, Alexa Caballo, is here to break down how things change before and after Election Day. But we're always hoping it changes for the better, Alexa. Absolutely. How are you? Good. How are you? Good to see you. Love your red, white, and blue vibes. Thank you. I love America. Absolutely. It's a good thing. It's a dream of homeownership. Yes. I know. So elections impact the real estate market? Always. Yep. How so? Yeah. Talk to us a little bit about this. Usually what we see is home sales in the month of November usually go down because a lot of people are focused on what's happening in the election, a lot of uncertainty. And then actually in the months of December and the year following, home sales go up. Even during the winter, the home sales go up. Yep. That's very interesting because I was told when I was selling my house in Canton, don't put it on in the winter. People are not going to want to wait until the spring when everything's alive. Yeah. So the election year is the only year where we'll kind of see a little bit of a spike towards the very end of the year because a lot of people, when there's the uncertainty of the election, anytime there's uncertainty, right? A lot of times people will sit on the sidelines and kind of wait to see what's going to happen. So that's one thing we see is home sales. The number of home sales go up the year following the election. And then also the home prices generally go up the year following the election as well. Aren't they high enough? Right? So this is such a fun little graph. This is a graph of the election year and the year after the home prices after the presidential election. You can see this is data from 1992 all the way to 2020. And in- Look at that 2020 jump. Yep. The only year out of all of those, the only year where the prices actually went down was in 2008, which was our huge recession, housing recession, financial crisis. But you can see how the impact of the presidential election has on home prices. Not, we're not, there's no political bias here, no political bent. Does it make a difference who's in the White House, whether it's a Republican or a Democrat, whether or not the markets will go on one way or another? We'll see kind of what happens with all that. But what I will tell you is that depending on how your town is, like if it's more red or more blue, depending on who wins and gets into office, if who you want to get into office, there's more economic boost just because of your morale, right? Just because of the psychology of who I want to win one. So people are more excited and more apt to like get more involved in the economy. Can home sales go up anymore than they already are? They can. And they will. In fact, Connecticut, we're trending so much more than the rest of the nation. Right. Our sale price is up 7.4% this time, over this time last year. Okay. And actually we're going to continue to go up unless something really drastically changes. Another thing and component when it comes to buying a home is the interest rates, right? And getting a loan. So is this the same case for usually the financial aspect of things? Yeah. So great question. So actually the time, the year leading up to an election year, we generally see the interest rates going down. So which they have so far, right? And so historically we'll see majority of the last several elections, interest rates usually go down election year. And I don't know if you guys remember, but last week we talked about forecasts for next year and Mortgage Bankers Association, Wells Fargo and Fannie Mae are all predicting quarter over quarter, the interest rates to continue to go down, landing at 5.68% in quarter four of 2025. Have you noticed your particular constituents? Have they been postponing? Are you seeing a lack of interest or no, because Connecticut's different? Connecticut's a little bit different because we have so much demand in our state, but definitely things do get a little bit quieter the last, I would say the last month or so, but we're still doing buyer consults, seller consults, getting people under contract. It's actually been a little bit easier to get people under contract more recently because there's maybe not as much competition. Oh, we were talking about that last week. So if someone has to post a, you know, their house for sale soon, they have a deadline, you would not say, you know, postpone it as long as you can? I would say, especially if you're looking to move to another home, if you find that home that you're looking to move to and it's listed, then get into action right away, right? Jump on it. Yeah. Um, but as far as waiting, you also want to think about, do you want to list your home during the holidays? Things like that. But if you do have a timeline in mind, we can help make it happen. Okay. All right. So, oh, go ahead. I was just going to say the less competition, the better. It may be a plus in some situations. Absolutely. If you're a buyer, the less competition of other offers offering against do competing for the same home, the better. However, as a seller, the less competition, the better as well, because there's more demand in your home. Do you find that, uh, it's the election cycle, whether it's a presidential election or an off year, things are different or generally runs the same. It's a, it's definitely when it's a presidential year, we'll see a lot more of the changes in what we just discussed. The home sale price, home sales, the election, the bigger, correct. Correct. And also the bigger the election, the bigger the uncertainty for people. Right. And then that's why people kind of pull back some more in the fence. It's all a gamble. That's what I'm getting at. Right. Thank you. Yeah. And speaking of pasta, cheese, a little lemon, and don't forget the broccoli. Yeah. And don't forget how you can get in touch with Alexa by the way, they're on your screen. I always forget that. I'm so sorry. We were channeling this through the chat. Yeah. We're going to have to do that.