The U.S presidential election of 2016 is still fourteen months away. But if you’re planning to sell your home anytime soon, this article from The Wall Street Journal explains why sooner may be better than later, based on recent data indicating that it might be harder to sell your home during an election year.
Can a looming election make it more difficult to sell your home? Yes – particularly if the contest is close.
In a paper published last year in the British Journal of Political Science, Princeton economist Brandice Canes-Wrone and her co-author Jee-Kwang Park used data from Zillow.com to look at housing sales during 73 U.S. gubernatorial elections in 35 states from 1999 to 2006. They found that in election years, home sales declined between two-tenths and three-tenths of a percent.
That might seem small, but the impact, they note, is comparable to “that of other, well-established influences on housing markets” such as a standard deviation decrease in per capita income growth.
The likely cause, says Dr. Canes-Wrone, is uncertainty, the notion being that house hunters are more reluctant to buy if they’re unsure how an upcoming election will affect their financial fortunes.
Bolstering this contention, she observes, is the fact that the study found the election effect was especially pronounced in the case of competitive races. In elections where the winner received less than 55% of the vote, home sales fell by between a third and a half of a percentage point.
In a separate analysis from 2012, real estate site Movoto uncovered a similar effect using data from the California Realtors Association to look at presidential elections.
