With the November 2016 presidential election nearing, many Southwest Floridians are wondering what will happen to the housing market. After experiencing healthy growth and stabilization over the past couple years, some fear the high emotions and unease surrounding the election might trickle into real estate.
Here’s what the experts say.

The Real Estate Market Reflects Consumer Confidence and Spending

The health of the economy dictates the housing market, and this is always the case. When people have stable jobs and are prosperous, when inflation doesn’t threaten and interest rates are low, people tend to be looser with their pocket strings. They’re confident in real estate investments and we see a healthy, balanced market.
The opposite also holds true. Economic unease causes buyers to wait and sellers to lose – the market stagnates, values drop, and sales decrease.

How Election Years Historically Affect the Real Estate Market

The good news is that if history repeats itself, as it often does, the effects of the presidential election will not be so great as to undo all the growth we’ve seen throughout Southwest Florida in recent years. Election years generally do not cause home values to drop – they just cause them to increase in value slightly less than usual.
In fact, based on data from Kiplinger that has followed home values in off-years and election years since 1980, the national average increase in house prices in off-years is 4.37%. In election years, the national average has been 4.15%. For 2016, it is estimates that the average increase in home values will fall from 5% to 3%. While it may sound like a lot, it’s important to remember that we’re still talking about a positive number – an increase in home values; just not as great of an increase.
Home values are not expected to drop below what they are now.

What it Means for Southwest Florida

This campaign has been a tumultuous one, with voters feeling very passionate and acting very divided over prospective candidates. While it’s unclear what will happen after January 20, 2017, Southwest Floridians appear mostly unfazed midway through this election year.
Inventory is up, prices are up, and there is a shortage of properties to meet the demand of the rental market. We know from experience that Florida is not immune to the ups and downs of the real estate market, but we also know that this is paradise and the market will always rebound.
Don’t be surprised to see a slowing in sales this winter as buyers wait and watch. While it’s unlikely the new president will make any significant changes to affect our local economy right away, remember that it’s consumer confidence that really drives the market. Whether real or perceived, trust (or lack of) in the judgment of our nation’s new leader will likely influence the investment decisions of some buyers.

Contact The Link Team to Buy or Sell this Election Year

Southwest Florida is currently enjoying a healthy, stable real estate market. Prices are steady, inventory is good, and interest rates are low. If you’re thinking about buying or selling this year, now is the time to do it! Call Nina Link at 239.357.5058 for honest, personal representation you can trust.