How will the upcoming election impact the real estate market in the Washington, DC area?
The conventional wisdom is that the DC market slows down in the weeks before a presidential election, because of uncertainty about the outcome, and then picks up again after the election and into the following year. The federal presence in the DC area is significant, with federal spending affecting the local economy and many federal officials, employees, and contractors living in the area. The policies and priorities of a new presidential administration can have significant impacts, so it's easy to understand how uncertainty about a new administration can make people hesitant to make a big financial and life decision like buying a home.
In this presidential election year, many people see stark differences between the candidates, as well as their policies and priorities. Given that, I think many people are feeling quite a lot of uncertainty about the outcome of this election and its implications. Not surprisingly, in recent weeks we have been seeing some slow down and uneveness in the market. Though we don't have October data yet, we're seeing very desirable properties (that we'd normally expect to go under contract relatively quickly) sitting on the market longer than expected.
After the election, it's possible there will be less widespread agreement about the outcome than has typically been the case historically. In that case, the sense of uncertainty that makes buyers hesitant may not dissipate until after inauguration. That said, the data for September indicated a strengthening market with supply increasing, demand increasing, and price increasing (see Fall Market post for more detail). Given this and the expectation that mortgage rates will continue generally to decrease, it's likely that the resolution of uncertainty about the election will coincide with these broader market forces, making for a strong spring market in the DMV.
