A presidential election is coming. One of the most important of our lifetime. But this will be my 4th election as a Realtor and let me tell you, it will make zero difference in the overall housing market.
Sure, activity will slow a little, so if you're selling, by all means avoid listing in November/December. But buyers, keep shopping. Your buying opportunity windows happen when everyone gets paralyzed.
I don't wait for dips to buy, I look for windows. They are obvious in retrospect but can be hard to spot at the time.
Very few things affect the housing market actually. Big events (COVID, interest rates, “acts of god”) can create temporary dips, but not nearly as often or with as much impact as we think. In retrospect, everything is a blip.
There have been a few different recent dips. Beginning of Covid - wow…And, there was a another nice opening two years ago when mortgage rates first spiked. Both times, everyone froze and smart buyers picked up houses at decent prices while everyone else waited for a crash that never came.
And that's how to spot a window. When you start hearing “we are just going to wait to see what happens", it's time to ramp up your search.
So the election might be a good time to snag a deal.
The election slows the market for one reason: fear. Fearful people hoard cash, and elections bring out the doomsdayers. "Declinism" is the belief that society is going to hell. “The end is near!” they say. “I'm moving to Canada/Florida (depending where you lie on the political spectrum - you know that guy)!" And all the while the housing market cools as debates intensify.
I say, keep shopping.
Declinism is an expensive belief, because if favors doing nothing. And in an inflationary environment (the new normal it seems), doing nothing means you're falling behind.
I don't think inflation is going anywhere anytime soon. It will take time to balance out decades of easy money policy.
Yes, inflation numbers are going down. But remember, when inflation slows, that doesn't mean prices are going down. It just means they will go up less fast.
And rest assured, inflation happens to houses too, meaning prices rise as everything gets more expensive. Funny how we talk about home appreciation, not home inflation, but it's the same thing.
Housing prices are up 20% in the last few years…but so are all prices. And just like the cost of Rao's Pasta Sauce is never going below $12 again, I don't think a good house in Silver Lake will ever be worth less than $2mil.
During times of inflation, you need to own assets that inflate. This year we may see an “election season” window for deals and real estate, so while your fellow homebuyers who don't read this newsletter are “waiting and seeing," you are buying an inflating asset at a discount.
Pessimists sound smart, but optimists make money.
