The Election’s Over – So What’s Next for Real Estate?

fortune-tellerNovember 11 2008  JetSetRnv8r has donned his turban and dusted-off his cyrstal ball for a look-see into the future. He knows exactly what’s going to happen and when, but he’s only going to share a little bit at a time to avoid causing a stampede.

As Vice President-elect Joe Biden famously said in one of the debates, “the past is prologue” so let’s take a look back at recent history to put the future into perspective.

Remember 2006? The country was bracing for mid-term elections. The House and Senate had both been under Republican control for twelve years. With an increasingly unpopular Republican president in the oval office, all eyes were on the elections to see if Democrats would make a come-back. There was a lot of anxiety through the summer and fall as these elections were seen as an important indicator to the future direction of the country, the economy, and the conduct of the war.

We didn’t know it then, but in retrospect 2006 was also the start of the leveling-off of the real estate bubble. House prices were reaching a plateau and sales activity was waning. JetSetRnv8r had a newly-completed house on the market. The house had garnered a lot of attention having been widely published, featured on HGTV and on a high-profile design tour. Now that it was on the market, it attracted lots of lookers, including its fair share of coveted celebrity shoppers, but there were no offers as we crossed the dreaded 60-day threshold.

Then came Election Day. Democrats swept both the House and the Senate achieving a clear majority. By 10:00AM the next morning, JetSetRnv8r had three offers on his house. By the end of the week, the house went out in trampoline-bounce3multiples at over asking price to a high-profile television and film star. JetSetRnv8r was not alone. The real estate market throughout Los Angeles experienced a very noticable election bounce that restored the market and pumped a little air back into the slowly deflating bubble, at least for a little while.

The lesson here is that elections do matter. Politics has a powerful effect on consumer confidence, and that directly affects every business including real estate.

So now that we’ve gotten through the most highly anticipated election in American history and elected a wildly popular new President who is expected to take the country in a radically (and welcomed) new direction, will we see an election bounce in the real estate market again? As of this writing, it’s been exactly one week since the election and it’s too soon to tell for sure. But anecdotal evidence collected by JetSetRnv8r among his circle of real estate agent contacts is that there has definitely been a surge in activity.

200187506-001Every realtor surveyed this weekend reported an increased number of calls on long-moribund listings and a frenzy of showing appointments. Attendance at this past Sunday’s open houses was definitely up, at least at those throughout the Hollywood Hills and Beverly Hills visited by JetSetRnv8r. For many months, JetSetRnv8r had been the only person on sign-in sheets and greeted by lonely, over-eager agents who jump up from their quiet reading on the couch. This past Sunday, sign-in sheets were overflowing and houses were comfortably full with the vibe of happy cocktail parties.

Pending Home SalesAs of this writing, JetSetRnv8r knows of no significant offers on long-time listings, but the post-election showings are definitely under way. Thirty to forty days from now will be the time to check the MLS for sales over the previous 30 days – the typical escrow period. Then JetSetRnv8r will reveal a little more of his prediction for the real estate recovery.

If you’re a real estate agent, let us know what you’re experiencing.

Read JetSetRnv8r’s posts on real estate sales trends in Beverly Hills here, the impact of the Wall Street bail-out here, how the real estate market brought down the entire economy here and here, and how to profit in a down market here.

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1 Comment

  1. Tom

     /  November 11, 2008

    Bounce? Perhaps a pimple in some markets, the real estate market is still and will continue to be very depressed. CitGroup, JPMorgan and others are beginning to address the mortgage foreclosure issue, it has nothing whatsoever to do with the election. Banks want you home like a politician takes responsibility.
    Politicians are completely responsible for the mortgage crisis, though they would rather you blame the banks, so how could the election of an anti-free market president backed by a like minded congress that oversaw the last two years of decline and did nothing possibly be the saviors of the real estate market.
    The market runs in cycles, we are at the bottom of it now, so unless our new political leaders do something to really screw it up – which they are perfectly capable of doing, the market will rebound on its own. Homes are currently selling at 2003 levels. In 2009 we will see a slight upswing in prospective buyers as people begin to realize what bargains there are out there. It will be slow at first, but still several more years until we even begin to approach the activity levels of pre-crash.
    If anyone is waiting for Washington to save them, my advice is hold onto your wallet and nail your front door shut.

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