The year 2020 will be remembered as one of the most challenging times of our lives. A worldwide pandemic, a recession causing historic unemployment, and a level of social unrest perhaps never seen before have all changed the way we live.
However, here in Florida the real estate market seems to be unaffected, as a new forecast projects there may be more homes purchased this year than last year. Our property management offices in Jacksonville and Pensacola are thriving.
As we come to the end of this tumultuous year, we’re preparing for perhaps the most contentious presidential election of the century. Today, it’s important to look at the impact past presidential election years have had on the real estate market so we can access how we might be affected where both of our real estate offices are located in the Jacksonville and Pensacola areas.
Is there a drop-off in home sales during a presidential election year?
BTIG, a research and analysis company looked at new home sales from 1963 through 2019 in their report titled One House, Two House, Red House, Blue House. They noted that in non-presidential years, there is a -9.8% decrease in November compared to October. This is the normal seasonality of the market, with a slowdown in activity that’s usually seen in fall and winter.
However, it also revealed that in presidential election years, the typical drop increases to -15%. The report explains why:
“This may indicate that potential homebuyers may become more cautious in the face of national election uncertainty.”
Buyers and sellers in the North Florida area should prepare for the possibility of a short respite in the real estate market.
Are those sales lost forever?
No. BTIG determined:
“This caution is temporary and ultimately results in deferred real estate home sales, as the economy, jobs, interest rates, and consumer confidence all have far more meaningful roles in the home purchase decision than a Presidential election result in the months that follow.”
In a separate study done by Meyers Research & Zonda, Ali Wolf, Chief Economist, agrees that those purchases are just delayed until after the election:
“History suggests that the slowdown is largely concentrated in November. In fact, the year after a presidential election is the best of the four-year cycle. This suggests that demand for new housing is not lost because of election uncertainty, rather it gets pushed out to the following year.”
Will it matter who is elected?
To some degree, but not in the overall number of home sales here in Jacksonville. As mentioned above, consumer confidence plays a significant role in a family’s desire to buy a home. How may consumer confidence impact the real estate housing market post-election? The BTIG report covered that as well:
“A change in administration might benefit trailing blue county housing dynamics. The re-election of President Trump could continue to propel red county outperformance.”
Again, overall Northeast Florida home sales should not be impacted in a significant way.
If mortgage rates remain near all-time lows, the economy continues to recover, and unemployment continues to decrease, the real estate market should remain strong up to and past the election.
All of us at Navy to Navy Homes are here to serve your real estate buying, selling, investing and rental needs. We’ve been involved in the real estate scene in the Jacksonville area for years and we have developed relationship with the many of the best mortgage lenders in the area. Navy to Navy Homes has recently expanded our property management services to Pensacola and we are now serving this new community in our role as property managers. We’re always here to help anyone who has questions about real estate investment.
The election will be behind us soon and we expect the market to continue to thrive.
If you’re looking for a reputable local lender to work with to purchase a new home or to invest in a multi-family home in the Jacksonville or Pensacola area, email us at email@example.com for a list of up to date recommendations.