Editor’s note: This article was first published in October 2020, ahead of that year’s presidential election. The seasonal pattern it describes comes from historical data.
Even with much of the country practicing social distancing in 2020, people were still buying houses. Historical data suggested that interest would dip as election day approached.
According to Meyers Research, new home sales in election years tend to fall about 15% from October to November, the month the nation chooses its president.
Why sales slow before an election
It comes down to uncertainty. A new president might raise taxes or change rules that affect homeowners. Beyond housing, some would-be buyers worry about their jobs and wonder whether a change in administration could mean cutbacks in their industry.
Faced with that uncertainty, many people wait.
Demand returns after the election
Ali Wolf, then Director of Economic Research at Meyers Research, found that in the December after an election and in the year that follows, the sales lost in November are recovered.
The rebound comes quickly. Buyers who held off before the vote usually kept browsing. Once the result is known, they go back to the list of homes they’d been following for months.
What this means for builders and investors
If demand reliably returns after an election, the weeks before it can be a good time to buy. An investor who purchases and renovates during the slow period has a finished property ready when buyers come back.
The same reasoning applies to any predictable lull. Buy and build when competition is lighter, and sell when demand picks up.
Sachem Lending offers loans for new construction, fix and flip projects and more. To get started, submit your application. You can also read our follow-up: What Has the Election Done for Real Estate?
