This past weekend marked a historic moment when President Joe Biden announced he would end his bid for reelection, with only 14 weeks remaining before the election. Shortly after, he endorsed Vice President Kamala Harris for President, who has now gained enough delegates to secure the party’s nomination at the Democratic National Convention next month.
While most of you are likely aware of this by now, I thought it was worth examining—although I generally try to steer away from discussing politics with clients and/or in public—how this might impact the housing market. There was heightened uncertainty about the election outcome following the Biden and Trump presidential debate, but this new announcement seems to have sparked renewed energy and confidence among the Democratic base. Nevertheless, it may be premature to assess where things may land in November, which may mean prospective buyers and sellers will continue to hold out until after the election.
It's a popular belief that an election year typically keeps prospective buyers and sellers on the sidelines, yet housing economists say there’s little evidence to support this. In fact, for most Americans, election results will have little direct effect on their income, according to a Bankrate mortgage expert, and thereby should not impact their decision to buy or sell.
Chief Investment Officer at New American Funding, Jason Obradovich, shares this perspective. He notes that while election years can increase price and rate volatility, this is no longer the case today. He said, “The challenges that impact housing today are unfortunately more structural than policy-driven, which means it will be very difficult for any administration to truly affect the market."
While this may or may not offer reassurance to those hesitant to sell or buy, we all remain unclear about the direction of the economy until Kamala Harris shares her vision. Whether her administration, should she be elected, continues down the path of the Biden-Harris administration or introduces new ideas to help lower inflation and strengthen the economy remains to be seen.
As we’ve seen time and time again, New York City’s real estate market is resilient and like no other, which means opportunities for the most part, are generally immune to the political climate. While this may not offer confidence and comfort to some would-be sellers and buyers, it’s key to remain informed and work with a real estate professional who can offer guidance, especially in times of uncertainty. As I mentioned at the start, we’re only 14 weeks away from the election, so it’s just a matter of months before we hopefully have a better sense of what is in store for our economy and, subsequently, the housing market.