Housing Market: SURPRISING Effects from Elections... | The Kwak Brothers

Housing Market: SURPRISING Effects from Elections…

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Housing Market: SURPRISING Effects from Elections…

How do elections, specifically presidential elections affect real estate, housing markets, and all things that relate to the real estate market? Well in this video I am going to breakdown EXACTLY what to look out for when it comes to real estate and presidential elections. As we all know during elections, many things could potentially change in the housing market depending on the policies of the candidate. BUT there are 2 main differences when it comes to real estate and presidential elections. When it comes to commercial real estate (stores, warehouses, multi-family units) more of the effect of the local elections has more to do with commercial real estate while presidential elections affect residential real estate. Why is that? Well stay tuned and I’ll be breaking down exactly why real estate and presidential elections affect the housing market! So back to my point earlier on how real estate and presidential elections affect the housing market. The housing market as a whole, meaning real estate, single-family homes, places where people live, are more affected by the presidential election. In comparison to commercial real estate, multi-family units, warehouses, are more affected by local elections. This is because local elections create local laws and tax codes that directly affect their local area. Tenant laws, landlord regulations, zoning, and everything that encompasses commercial real estate, is bound to the local government laws. The net operating income is the number that a commercial real estate property performs in regard to profits. This is a calculation that investors use to see if a commercial real estate property is worth investing in or not. My second point when it comes to real estate and presidential elections is that residential real estate is affected MORE than commercial real estate. For instance, President Trump signed the tax cuts & jobs act of 2017. In a nutshell, you CAN NOT write off over $10k of expenses in a home over $400k. This hurt a certain class of people but homes under this price went lower and we saw some growth in the housing market for those prices of homes, which means people were buying more homes in that price range. Especially in states that have a budget problem. Lastly, in regard to real estate and presidential elections, you will see the prices of homes decrease. This is because of the financial uncertainty in the new president if a new one is elected. So people are less likely to spend, especially in the housing market, without knowing the outcome of said election. And generally, during fall months, prices drop anyway, regardless if it is an election year or not. So now you know how real estate and presidential elections are connected!

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