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Do Elections Impact the Housing Market in Los Angeles and Beverly Hills?

Do Elections Impact the Housing Market in Los Angeles and Beverly Hills?

By Christophe Choo Posted Jun 17, 2024 Latest Updates, Market Activity, Real Estate Advice for Buyers & Sellers, Real Estate Articles, What I'm Reading

Do Elections Impact the Housing Market in Los Angeles and Beverly Hills? | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert

As the 2024 Presidential election approaches, you might wonder how such a significant event could impact your decision to buy or sell a home. Given the magnitude of this decision, it’s only natural to consider the potential effects of an election on the housing market, particularly in vibrant markets like Los Angeles and Beverly Hills, CA.

Historical Impact of Presidential Elections on the Housing Market

Historically, Presidential elections have only had a small, temporary impact on the housing market. Here’s a closer look at how home sales, prices, and mortgage rates have responded during election periods.

Home Sales

During the month of November in election years, there is typically a slight slowdown in home sales. Ali Wolf, Chief Economist at Zonda, notes:

“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”

This slowdown is largely due to uncertainty and hesitation among potential buyers and sellers during a pivotal time. However, this slowdown is temporary. Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) indicates that home sales usually bounce back in December and continue to rise the following year. In fact, after nine of the last 11 Presidential elections, home sales increased the next year.

Home Prices

Do home prices drop during election years? Typically, no. According to residential appraiser and housing analyst Ryan Lundquist:

“An election year doesn’t alter the price trend that is already happening in the market.”

Home prices generally rise year-over-year, regardless of elections. Data from NAR shows that after seven of the last eight Presidential elections, home prices increased the following year. The only exception was during the housing market crash, which was an atypical year.

Mortgage Rates

Mortgage rates are crucial because they affect your monthly payments when buying a home. Data from Freddie Mac shows that in eight of the last 11 Presidential election years, mortgage rates decreased from July to November. Most forecasts expect mortgage rates to ease slightly throughout the remainder of the year, following the trend of declining rates leading up to most previous elections. Lower rates could mean lower monthly payments, making it a potentially good time to buy a home.

The Los Angeles and Beverly Hills Market

Los Angeles and Beverly Hills are unique real estate markets known for their luxury properties, historical homes, and celebrity residents. Despite the temporary effects of election years, these markets remain robust and resilient. Here’s why:

Stability and Demand

Los Angeles and Beverly Hills are always in high demand due to their prime locations, world-class amenities, and cultural significance. Whether it's the allure of Hollywood, the pristine beaches, or the high-end shopping and dining, these areas attract a diverse and affluent clientele.

Investment Potential

Properties in Beverly Hills and Los Angeles are seen as valuable investments. The historical appreciation of real estate in these areas provides a level of security for buyers and sellers, even during uncertain times like election years.

Unique Listings

The architectural diversity and historical significance of many homes in Beverly Hills and Los Angeles add to their appeal. From classic Spanish-style homes to modern luxury estates, the variety ensures there’s something for everyone, making these markets less susceptible to broader market fluctuations.

What This Means for You

While Presidential elections do have some impact on the housing market, the effects are usually small and temporary. Lisa Sturtevant, Chief Economist at Bright MLS, emphasizes:

“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”

For most buyers and sellers, especially in strong markets like Los Angeles and Beverly Hills, elections don’t have a major impact on their plans. The key is to stay informed and work with knowledgeable real estate professionals who can help you navigate the market, election year or not.

Bottom Line

While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. For help navigating the market in Los Angeles, Beverly Hills, or any other area, let’s connect. Your dream home is waiting, and together, we can make it a reality.

Call Christophe Choo at (310) 777-6342 to tour your future home "HERE" or click "HERE" to estimate your home value

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