There have been a lot of news stories lately about property values and the upcoming election. In the BBC news section of their site the other day several undecided voters expressed the concern that if Biden wins it will be harder for them to buy their first home. In other publications undecided voters are claiming that if Trump wins it will drive home prices up and cut them out of home ownership very quickly. People seem able to rationalize both sides of the story using facts that they have collected.
But the truth is that they are all wrong. Whoever wins this election will have no effect at all on property values. In our opinion they should continue to go up no matter what the result is.
The only time property values crash is when there is an inherent problem within the system itself. This happened in 2006 and 2007 leading to the worst housing crisis in a generation. But the President had nothing to do with that. In fact even the entire government had no control over it.
Instead that was a problem with the banks themselves. In order to keep collecting fees to issue mortgages they kept giving them to anyone who applied. Then they added very low mortgage repayments for a short period of time before jacking up the prices six months or a year later. This caught a lot of people unaware and caused them to default on their mortgage payments.
That would have happened no matter who was president.
According to Global Trade Magazine the amount of home sales tend to decline in September and October of Election Years. This causes a brief decline in housing prices as people who are desperate to sell accept less for their property than it is actually worth.
But in each and every election cycle buying and selling real estate actually increases after the election is done with no matter who wins. That’s because the two months of not buying and selling much has increased demand. When this happens housing prices are automatically pushed up. Over time this balances itself out.
What could effect housing prices is the coronavirus.
But again the President has nothing to do with this. With fewer people willing to go out and look at houses that is naturally going to repress the amount of real estate being bought and sold. That could have a depressed effect on the overall prices going down.
But you have to remember that won’t last forever.
The UK claims to be very close to developing a vaccine. Other countries are also working on it. And once that vaccine is released people will go back to buying and selling homes. Once again because of the backup in the marketplace that should encourage fierce competition which would drive prices up again.
This is all completely independent of who the actual president is. Therefore one thing you don’t have to worry about this election season is the price of a home you want to buy being effected by the outcome.