If you’ve also been feeling like you’ve been holding your breath since election night, you’re not alone. Whichever side of the aisle you’re on, it feels like the whole world is on pause until we know who is going to be leading the country.
That’s one of the many reasons why, during presidential elections, real estate sales tend to slow down for a short period of time. People do not like to make major financial decisions when there are so many uncertainties. The real estate market often hits a brief pause, as buyers and sellers hold back on major decisions. Sellers hold off on placing their properties on the market so they can determine the best price as well as ensure their properties do not accrue more time in the market while buyers are hitting the pause button until they see what the results are and how it will affect them. This is especially true for buyers who are dependent on loans and know interest rates are going to be a big factor.
There’s also a seasonal factor, or more accurately, an off-season factor. Elections are held during the shoulder season and that should not be discounted—we know the highest time to sell/buy a home is in the spring and summer. Once the election results are in and the market gains clarity on policy directions, the market typically resumes its usual pace.
On November 11, Lawrence Yun, Chief Economist of the National Association of Realtors told a crowd of real estate professionals who had gathered in Boston, Mass. for NAR NXT, the largest annual event for the most successful real estate professionals, “We’ve seen after presidential elections—and it doesn’t matter who wins—that there’s usually a slight boost in home sales,” Yun said. “It removes some uncertainty. Now you know it’s the policy, and you can make predictions about what will happen and make a decision based on that.”
Now that Trump was elected, what happens now? Data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows that after nine of the last eleven presidential elections, home sales increased the following year. Also historically, home prices do not fall after a presidential election; on the contrary, they frequently rise. Many would say that investors see the opportunities of investing in real estate over stocks as they are more stable, especially during elections, and when new policies are being implemented.
When discussing real estate prices, it’s essential to consider multiple factors, including interest rates and the dynamics of supply and demand. Policy changes, for example, can encourage new development, which increases housing supply and helps stabilize the market, especially in areas like our Roaring Fork Valley, where housing demand remains high, and supply is limited.
As Yun noted, “Mortgage rates in [Trump’s] first term (at 4%) were the good old days. Are we going to go back to 4 percent? Per my forecast, unfortunately, we will not. It’s more likely that we’ll go back to 6 percent. That will be the new normal, bouncing around 5.5%-6.5%.” Lower interest rates, even if they stabilize around this new normal, can still increase buyers' purchasing power, enabling them to invest more confidently and build their financial wealth and generational wealth.”
In a world where economic and political shifts can impact housing markets, our valley, and our entire state remains impressively resilient. Local real estate continues to thrive, drawing in newcomers and retaining long-time residents. But why does our region withstand the fluctuations that shake other areas? The answer is all around us—just look outside. Presidential elections don’t change the fact that Aspen and the Roaring Fork Valley remain one of the most desirable places to live—and buy real estate—in the world.