Will a Presidential election year impact the Boston downtown real estate market?
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Will a Presidential election year impact the Boston downtown real estate market?
Reading the resi crystal ball in the year of the race
Conventional wisdom says to expect a slowdown this fall, but economists aren’t so sure
In the residential market, election years are boogeymen.
The only issue: Nobody has really been able to prove this is true.
Several housing economists told The Real Deal they’ve found no empirical evidence of a relationship between the housing market and election years.
“The effect is more on sentiment and psychology than any real activity in the housing market,” Realtor.com senior economist Ralph McLaughlin said.
Still, brokers have to keep up with ebbs and flows of consumer sentiment in order to respond to clients and hit sales targets, and firms do factor political activity into their financial forecasts.
Economists such as McLaughlin typically solve for that kind of confounding variable with econometric models built off of large data sets, but analyzing election years leaves only a handful of observations — Redfin, for example, only has data going back to 2012 — with which to work.
That data includes one election year, 2020, when there was also a global pandemic. The 2008 election year data captured the generational housing market collapse more than the Obama-McCain showdown.
Longtime series “weed out those other things that are changing simultaneously” to isolate the effect on the market to the political election, said Michael Seiler, professor of finance and real estate at William & Mary. “But the small time period, a small number of observations, there’s no way you’re going to do that.”
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Will a Presidential election year impact the Boston downtown real estate market?
These two videos below explain how an election year can impact the downtown Boston real estate market both as a buyer and seller.
I think you’ll find both these videos very helpful
