The Housing Market Remains Strong
Politics can be very polarizing. It seems like this presidential election has been especially nasty. Everyone is collectively holding their breath to see who will come out on top. Both sides suggest there will be big changes coming (for the better), but will there really be a big swing. Let’s look at how this election will affect the real estate market.
First of all, we have very short memories. Almost every presidential election features mud slinging and name calling. The politicians magnify the problems and suggest they are going to be the solution. This negativity has produces a noticeable pause in the real estate market. Sales remain historically strong, but buyers and sellers aren’t really making many major financial decisions right now. The most common response I am hearing is “Let’s see how this election turns out.” No matter who wins this election, history suggest they won’t make an immediate impact on the real estate market.
Like most elections, the country is almost evenly divided how the next administration should tackle our problems. The reality is that Americans will continue to be resilient whomever wins. After George W. Bush and Barak Obama were each elected a lot of Americans thought the country was going to fall apart. We have experienced ups and downs in the last 16 years, but the market continues its cycle regardless of who is in the White House.
The two most common affection consumers right now are fear and uncertainty. Both sides are spreading fear as a tool to show their opponent is weak. Hopefully, this fear will dissipate when the next president is elected. I have never believed fear mongering to be fruitful and it does nothing but hurt morale. The next president should do everything in their power to calm the waters and assure Americans are confident going forward.
I believer we will continue to experience uncertainty heading into 2017. Because the real estate market is driven by consumer spending and is shaped by housing availability it will constantly be moving. The one factor we do know, without a doubt, is that interest rates are going to go up. We still remain significantly below the historical average of about 6%. When the interest rates begin to rise it will have a negative effect on consumer spending. Coupled with massive development to correct low inventory we will probably see a shift in the real estate market in 2017.
What does the mean for the real estate market? It has been such a terrific “Seller’s Market” for a few years we should expect it to level off soon. The Luxury Market in Omaha is already seeing changes and this should trickle down into the lower price points as interest rates rise. We might even see a “Buyer’s Market” coming in the near future.
Only time will tell, but with a market economy “The Only True Constant is Change.”(Heroiclitus). The next president will undoubtedly affect the coming real estate market, but the wheels of change have been in motion for a long time.
Here are a couple articles showing how past presidential elections have affected the real estate market:
Chris Bober is an Associate Broker and leader of Team Bober, a group of REALTORS® at Nebraska Realty in Omaha, NE offering a wide range of real estate services including home and new construction sales, land and farm sales, and auctioneering services. For more information please call Chris at (402) 312-5076 or email him at info@ChrisBober.com. TeamBober.com