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Should I Buy or Sell During an Election Year?

Although the 2016 presidential election is still months away and we don’t yet know which candidate will represent each party, we know for certain that housing sales can decline the closer it gets to an election. This could actually be good news if you're trying to sell your home due to the law of supply and demand. When the supply is lower, it increases demand as well as selling prices. Consider this: In a 2014 study conducted at Princeton University, researchers discovered that home sales fell between two-tenths and three-tenths of a percent during gubernatorial elections in 35 states between 1999 and 2006. Although the percentage is small, the effect is comparable to other influences on the housing market such as a steady decline in per-capita income.

What Makes People More Reluctant to Buy a Home in an Election Year?

Since the Princeton University study includes only state elections, it’s safe to assume that the effect is likely to be larger when the political stakes are at the national level. One reason for the hesitation is that perspective home buyers are not sure how the outcome of the election will affect their personal finances. When the winning candidate receives less than 55 percent of the vote, the uncertainty is even greater. This is reflected in the fact that home sales fall an average of one-third to one-half of a percentage point during tight races.

The Good News

You should not let these...

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