How Does An Election Year Impact Santa Barbara Real Estate?
Presidential elections have far reaching consequences. The real estate market is not immune to this phenomenon. But it is not completely clear exactly how much of an effect an election has on real estate, nor are election outcomes guarantees of any particular market shift. However, the simple fact that it is an election year does have a measurable impact on the residential real estate market in Santa Barbara. We'll explore this in the following blog.
Do Santa Barbara Home Values Change In An Election Year?
Generally, due to the uncertainty that a major election can bring, many believe that home values drop in election years. However, the numbers don't back that up. In fact, home prices have appreciated at greater rates in each election year since 2012. While many other factors come into play in the Santa Barbara real estate market, it is no coincidence that this is the case.
2020 saw extraordinary home value increases, and much of this was due to the lack of inventory and increased buyer demand. In the wake of the pandemic, with jobs becoming remote first, more and more buyers looked to move to more attractive climates, like Santa Barbara. However, even with 2020 being an outlier, home values have appreciated an average of 8.25% in election years since 1988, while the average for all years hovers around 6.80%, according to a study by Bankrate.
So why don't elections have a strong impact on the housing market in Santa Barbara? Well, the reality is that they do, but not as much as other economic forces. Rising interest rates will move buyers out of the market at a higher rate than uncertainty over who wins an election. In 2008, home values plummeted, but this was due to the subprime mortgage crisis, not an election. Likewise, home values soared in 2004, but this had nothing to do with an election, but rather the housing bubble reaching its peak.
Should I Buy a Home In Santa Barbara In An Election Year?
The answer to this question is yes, if you are in the market to buy a new home. The decision to buy a home really doesn't rest on whether or not there is a presidential election happening, but rather your own personal circumstances. Whether or not it is an election year, you may still have a baby and need an extra room. Or, your child will graduate from high school and go off to college, leaving you to decide whether or not to downsize. You may get a promotion at work, or you may change jobs.
All of these factors make up the decision to buy a new home in Santa Barbara. Letting the uncertainty of an election dictate your decision will cause you to miss out on your potential dream home.
Should I Sell My Santa Barbara Home In An Election Year?
With home values appreciating at a record pace, specifically in the luxury market, selling your home in 2024 could be a major financial windfall. Of course, much like the decision to buy a home, selling your home will depend on many factors independent of an election.
Selling your home in Santa Barbara can be a good decision, but only if you're in the mindset to sell. Life circumstances will dictate whether or not selling your house is a good move for you. However, it will matter little whether or not it is an election year in terms of determining the right asking price and other considerations.
Should Election Uncertainty Factor Into My Real Estate Decisions At All?
While uncertainty can cause some fear, it also is worth pointing out that major policy decisions might be made before the end of 2024, but they most likely won't have an immediate effect. In other words, making a decision to buy or sell your home between now and the end of the year won't have a major impact on the amount of money you can save or make from your decision.
That being said, NOT making a move is still making a move. The uncertainty in elections cuts both ways, so while making a decision is one idea, not making a decision is also, in a way, making a decision.
If you're considering a move before the end of 2024, contact a Santa Barbara real estate expert, Maureen McDermut, today.
