We hear it all the time: The real estate market in the metro area really picks up after national elections, especially in Presidential election years. But is that really true?
Here are the basics: There are 3,000 jobs appointed by the President and 24,000 jobs on Capitol Hill. On the surface, the possibility of a change in 27,000 jobs should have an enormous impact on the real estate market. But in reality, past elections show that the effect is minimal.
On the heels of the major changes in the makeup of Congress in 2010, the number of sales in the immediate D.C. area rose less than 1 percent. The election of 2008 brought a change in the White House and a change of 29 seats in Congress.
There was an increase of almost 20 percent in the number of sales in 2009 compared to 2008 — so on the surface one might be tempted to say these elections had a major impact on the region’s real estate market. However, in February of 2009 Congress passed and the new President signed into law the first round of the Homebuyer’s Tax Credit, and the number of sales jumped nationally, too.
In 2006, there was a change of 35 seats in Congress — and sales activity declined 23 percent in 2007. The accompanying table, going back to the election of 2000, shows that one would be hard-pressed to find a correlation between changes on Capitol Hill and the White House and home sales.
|Election year||Change in Congress||Change in White House||Next year’s change in sales|
Remember that there are other significant factors here. Individuals do not make a decision to purchase a home in a vacuum. Just moving to the area to take a new job — even a new job on the Hill or in the Executive Branch — does not cause an individual to ignore overall market conditions.
There are market-related reasons that potential purchasers today are cautious. Also remember that while there may be new occupants of these jobs, these are not “new” jobs like we see created when a company moves here. This is simply turnover, so there’s no other major impact on the economy.
From my perspective, the post-election “boom” is a myth, and one should not base one’s housing decisions on the supposed impact of the election. Sell when it is the right time for you to sell; buy when it is the right time for you to buy. Market timing is a pretty risky endeavor — particularly if one’s timing is based on politics.
David Howell is an executive vice president and chief information officer at McEnearney Associates. This blog post is an edited version of an article that appeared on McEnearney’s blog.