Everyone knows it is an election year, and November is just months away. If you're thinking about buying or selling a home, you're probably curious about what effect, if any, elections have on the housing market. It’s a great question and it's natural to wonder how such a major event might impact your plans.
Historically, home prices have proven to be remarkably resilient, even in the face of political uncertainty. According to data from the National Association of Realtors (NAR), after seven of the last eight Presidential elections, home prices increased the following year. For example:
- 2016 Election: Home prices increased by 6.1% in 2017.
- 2012 Election: Home prices rose by 11.5% in 2013.
- 2008 Election: Despite the ongoing financial crisis, home prices began to recover in 2009, with a modest 0.3% increase.
- 2004 Election: Home prices jumped by 12.1% in 2005.
- 2000 Election: Prices rose by 7.4% in 2001.
***The only exception in recent history was the 2008 election, which coincided with the housing market crash, a period marked by a 9.8% decline in home prices. However, this was far from a typical year and was driven by the larger financial crisis rather than the election itself.
In addition to price stability, mortgage rates often follow a downward trend during election years. Historically, rates have tended to decrease slightly in the months leading up to and following an election. For instance, in 2020, mortgage rates fell to an average of 2.68% by the end of the year, contributing to a surge in home-buying activity.
In Florida, particularly, the luxury real estate market continues to thrive, supported by significant population growth. For the first time, our state’s population has topped 23 million, reaching a record high. Florida is now the third most populous state in the U.S., trailing only California and Texas. Over the next five years, population growth is expected to average about 319,000 new residents each year, with many choosing to settle in areas like Sarasota. This population boom has driven demand for housing, particularly in the luxury segment. In 2023 alone, the Sarasota-Manatee region saw a 9.2% increase in median home prices, with the luxury market outperforming expectations as more affluent buyers seek the high-quality living that Sarasota offers.
For sellers, this influx of new residents creates a continuous demand for luxury properties, ensuring a strong market even during election years.
For buyers, the combination of stable prices and potentially lower mortgage rates presents an excellent opportunity to invest in luxury real estate.
As always, we are here to assure you of a successful real estate transaction. The history of luxury real estate prices following the Presidential elections shows that the market's strength is enduring, even in the face of political uncertainty. Thank you for your trust and your referrals. We look forward to helping you navigate the opportunities ahead!
- The Schafers
