Selling and/or buying a home is a sizable decision, and your property deserves its best shot at success on the market. Between the pandemic, the upcoming election, and uncertainty about the future, it can sometimes seem intimidating to enter into the housing market. If you’re hoping to list a property this year, here are a few things to keep in mind.
No Such Thing as the “Perfect Time”
The election cycle is often a turbulent time—perhaps even more so this year, as 2020 has asked millions to shelter in place and work from home in the process. While it’s true that uncertainty can sway buyers, there’s truly no such thing as the perfect time to list. Each season comes with its own pros and cons. Plus, it’s helpful to keep in mind that we aren’t facing the end of the world. Our community is strong and resilient, and buyers who are considering Bay Area real estate are drawn to our lifestyle, our compassion, and our beautiful city. The election won’t change that. Here are a few trends we can expect to see in the market in the upcoming months that affect both sellers and buyers.
Sales Fall, Then Rise
Historically speaking, sales tend to fall in November during election cycles, and it isn’t likely that this will change in 2020. According to BTIG Research, between 1963 and 2019, November sales dipped 15% during election cycles whereas non-election years only slipped 9.8%. But don’t let the numbers scare you! While sales tip downward during November, this is largely met with increased sales numbers in December as life returns to “normal.”
The Value of a Home
While sales may initially dip, there is additional evidence to support that the price of homes on the market will reflect the consumer’s hesitation. California real estate in particular shows a trend of rising 1.5% less in price during election cycles as opposed to non-election years as far back as 1980. This could be attractive to buyers who hope to move into their dream property before prices hitch during the next calendar year.
Consider the Client
While luxury real estate buyers may prefer to wait until after the election to consider large-scale purchases, preparing your estate for sale allows you to get a leg up on the competition. Because candidate platforms such as taxation implementation often affect the upper echelon first, high-end buyers may be more reticent to jump on a new listing until the results of the election are known. However, the serious homebuyers won’t be permanently deterred from perusing the housing market. Their decisions may be delayed, as mentioned previously, but consumers will still be inclined to buy after the dust settles.
The Big Picture
Federal elections are momentous events in our nation’s history, with large national-level impacts. However, local housing markets operate on a much smaller scale. The effects of the presidential election have historically shown some influence over real estate trends, but negative effects are largely short-term and don’t always reflect the microeconomics present in each city across the nation. In the BTIG Research study “One House, Two House, Red House, Blue House,” it is noted that communities with strong party ties may experience a shift one way or the other depending on the outcome of the election—Democratic-leaning cities may experience a boost if the incumbent candidate Joe Biden takes the victory, while Republican areas could see a rise in performance should Donald Trump win re-election.
Buyers Are Motivated
November may not be the first time of year you consider when listing a house—especially during an election year. However, this can be a surprising advantage in the market. Whether forced to search for a new home due to a relocation, the expiration of a lease, or a myriad of other reasons, buyers who are house hunting toward the end of the year are likely motivated to find a place to call home for the holidays and may be more serious buyers compared to shoppers who peruse properties during the spring.
Fewer Sellers Competing
With less competition, listing this time of year can make your property stand out. Reports show that listings historically drop as winter approaches, so listing your property during the season of elections can help it make a bigger splash in a smaller pond. Waiting until the election cycle is over or until spring comes will only mean a hotter market, a steeper competition, and a more difficult time getting committed buyers interested in your listing.
Smart, Stable Investments
Keen buyers recognize that real estate is a long-term investment with a high margin ROI, so when push comes to shove, real estate is a safe bet. Compared to investing in the stock market (which can change drastically overnight), real estate investments are much more stable and normally won’t move more than 15% in either direction. This appeals to buyers who crave stability amidst the chaos. Real estate is also a high-performing asset, which intrigues buyers, as this type of investment can stand the rising and falling tides of economical change. When the cost of living rises so does the value of the real estate asset. “Buy and hold” investments are long-term financial endeavors, and real estate continuously proves to be one of the most valuable investments we make in our lives.
Buying a home later during the year has its own distinct perks, one of which is the ability to lock down a mortgage rate before the new year, when interest rates might spike. Current mortgage rates are at an all-time low, making this an excellent time to consider a new house.
Securing a Home Base
Finding that perfect home is a huge draw for potential buyers. As the holidays loom on the horizon, homebuyers are daydreaming about a place they can call their own. Homes are our safe haven, our home base, our solace during a storm, and despite the turbulent year, the number of homes sold on the market has spiked in the second half of 2020, according to this census report.
Home Away from Home
Additionally, 2020 has reminded us all how deeply important our homes are. Because we’re spending more time at the house and less time at the office, it’s important to live somewhere you love. Secondary homeownership is one way for buyers to cultivate a sense of restorative peace while sticking close to home, and listing your property near the election will put your house on the market for anyone dreaming of escape.
So, To List or Not To List?
Sometimes, the most daunting circumstances create the most wonderful opportunities. The real estate market is ultimately determined not by the presidential election but rather by simple supply and demand. While others in the Bay Area are considering holding off on their listings to wait for that elusive “perfect time,” we can reach a fresh, new market of enthusiastic buyers. With less competition, your property will stand out to consumers who are eager to plant roots in San Francisco. Listing near the election might sound intimidating on paper, but finding the perfect home stretches beyond the tides of politics. Once the ballots are voted, buyers will still want a warm place to call home, regardless of the results.
When you’re ready to list your piece of San Francisco real estate or if you’re interested in learning more about San Francisco homes for sale, contact me for more information.