With the 2024 Presidential election just around the corner, many in San Diego are wondering if this political event will influence the housing market. If you’re considering buying or selling a home, this is a crucial question to address. Buying or selling a home is a significant decision, and it’s important to understand how major events like elections could impact your plans. In San Diego, the housing market has shown only minor, short-term changes during past Presidential elections.
Home Sales and Presidential Elections in San Diego
During the month of November, when a Presidential election takes place, home sales typically experience a slight slowdown. Ali Wolf, Chief Economist at Zonda, explains:
“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”
This slowdown happens because some people feel uncertain and hesitant about making big decisions during such a pivotal time. However, it’s important to note that this slowdown is temporary. Historically, home sales bounce back in December and continue to rise the following year.
Here in San Diego, our vibrant real estate market is known for its desirable neighborhoods like North Park and South Park; this trend is also noticeable. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after nine of the last eleven Presidential elections, home sales increased the following year.
The graph below illustrates annual home sales since back in the year of 1978, with each Presidential election year marked in pink. The year immediately after each election is shown in green if existing home sales rose, while the two blue bars represent the only years when home sales decreased after an election.
This historical pattern reassures buyers and sellers in San Diego that any election-related slowdown in the housing market is usually short-lived, with a strong rebound expected in the subsequent months.
Home Prices During Election Years
Have you ever wondered about home prices during election years? Do they tend to drop? Generally, the answer is no.
According to residential appraiser and housing analyst Ryan Lundquist:
“An election year doesn’t alter the price trend that is already happening in the market.”
In San Diego, the housing market mirrors this resilience. The latest data from the National Association of Realtors (NAR) indicates that following seven out of the last eight Presidential elections, home prices increased the subsequent year.
The accompanying graph illustrates this trend, with election years highlighted in pink. The sole instance when prices declined post-election is marked in blue, which occurred during the housing market crash—a highly unusual period. Today’s market conditions are vastly different from that time.
All the purple bars depict periods when prices rose in the year following an election. Therefore, if you’re concerned about your home losing value due to an election, rest assured that, in most cases, home prices tend to rise after Presidential elections. This pattern is particularly evident in stable and thriving markets like San Diego.
Mortgage Rates During Election Years
Mortgage rates significantly influence your monthly payments when buying a home. According to Freddie Mac, in eight out of the last eleven Presidential election years, mortgage rates have dropped between July and November. This pattern indicates that election periods often bring lower mortgage rates.
Current forecasts predict a slight decrease in mortgage rates for the remainder of the year. If these forecasts are accurate, we might see this trend continue. For prospective homebuyers in San Diego, this is encouraging news. Lower mortgage rates translate to reduced monthly payments, making homeownership more accessible in our vibrant city.
San Diego’s real estate market is dynamic, and understanding mortgage trends can help you make informed decisions. Whether you’re eyeing a cozy condo in North Park or a family home in South Park, staying updated on mortgage rates can save you money and stress in the long run. If you’re planning to buy a home in the coming months, keep an eye on these trends and contact us, the McT Real Estate Group, your local real estate experts, to navigate the market effectively.
What This Means for You
So, what does this mean for you? Presidential elections might influence the housing market, but these changes are usually minor and short-lived.
According to Lisa Sturtevant, Chief Economist at Bright MLS:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
In San Diego, this holds true as well. Our local real estate market remains robust, with only slight fluctuations around election times. For most buyers and sellers in San Diego, the election doesn’t drastically alter their plans. Whether you’re looking to buy a charming home in North Park or sell a condo in South Park, the overall impact of elections on your decision-making process will be minimal.
Focus on your real estate goals and trust that the San Diego market remains stable, even during election years.
Conclusion
During an election year, it’s normal to feel some uncertainty about the housing market. However, historical trends indicate that the market remains strong and resilient regardless of political changes. If you need assistance navigating the San Diego housing market, whether during an election year or any other time, the McT Real Estate Group is here to help. Let’s connect and ensure you make informed decisions for your real estate needs. San Diego’s vibrant neighborhoods and desirable lifestyle make it a great place to buy or sell a home, no matter the political climate.
