We are just five weeks away from another Presidential election. So how does that impact the real estate market? Typically, the real estate market tends to slow down in an election year, usually as you get closer to the actual date. I think that you can take that conventional wisdom and throw it out of the window this year because there has been nothing typical about this year’s real estate market. Here is what I mean:
1) I did not predict that the market would turn around this fast in Denver, but it did.
2) I did not think inventory would remain so low. We never got above the 10,000 unit mark all year in single family homes.
3) I was expecting August to be slow like it was most years when kids go back to school, but it was one of the best August’s ever.
4) I expected the market to slow down when we got to September in preparation for the election, but it did not.
5) I expected more foreclosures and they never came.
As you can see, there has been nothing typical about this real estate year, which brings us to the question of how will the market react to the next President? The answer is, there will not be much of a difference. Wall Street does not like change and they do not like surprises. They have already accounted for another term of President Obama and they have planned for a new term with President Romney. Their predictions and reactions to the election are already baked into the cake. They know exactly how they will react with Obama, and exactly how they will react with Romney. I am sure there will be some investors that will be bullish on the market, predicting expansion and growth in a Romney Presidency. There will also be some investors who will be bearish if Obama gets re-elected. I suppose the two will balance each other out and the market will continue along, hanging around 13,000 points regardless of who is elected.
In closing, the main factors affecting how the real estate market will perform in Colorado will continue to be inventory, interest rates, and jobs.
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