Expect prices to hold steady but home sales to take a dip this fall in Maine, since presidential election years typically lead to changes in buying and selling habits.
New home sales see a median drop of 15 percent from October to November in each year when the U.S. chooses its president, according to Meyers Research, a housing consultancy firm that analyzed data from 13 past presidential elections. The study found that the traditional seasonal decline for that period is only 8 percent.
“People seem to take a pause in the fall,” Ann Cianchette, a Portland-based realtor with Keller-Williams Realty, said. “People delay putting their house on the market.”
That could be happening for any number of highly personal reasons. One idea is that these slowdowns primarily benefit wealthier people who are making non-essential purchases because a new administration may come with policy shifts including tax cuts. That would make it beneficial to wait and see who’s elected before buying a new home.
Cianchette, who runs a luxury brokerage firm, said she saw that materialize during the deeply uncertain 2016 election that led the presidency to switch from Barack Obama to Donald Trump. She doesn’t think this year will be hugely consequential, since Trump’s 2018 tax cuts have remained in effect. He is running again in 2024 against President Joe Biden.
Most people who do wait to buy or sell a home around a presidential election because of fear of the unknown, said Dava Davin, founder and principal of Portside Real Estate Group.
“It’s just a little bit paralyzing to make big decisions, depending on how passionate you are about the presidency,” Davin said. “We see a little pausing.”
There’s ambivalent research on whether prices increase or decrease during a presidential election year. One study from California found that home prices increase less during election years, while a Bankrate analysis found that the opposite has generally happened nationwide.
Davin doesn’t think the state’s high home prices will be affected. While conducting research to present to the Maine Real Estate & Development Association on this subject, she couldn’t find any evidence linking prices with election years here in the last several cycles.
Both she and Cianchette believe there are far more significant market forces acting to keep home sales down and prices up than it being an election year. Most people who need to buy a home this fall are going to do so, regardless of who’s elected in November, Cianchette noted.
“You might see buyers delay pulling the trigger, but those are usually buyers and sellers who don’t have to buy and don’t have to sell,” she said. “More people don’t want to sell their house because they’re sitting on a really great interest rate.”
Critically low levels of housing inventory across Maine are more to blame for sales being depressed. Though some realtors are hopeful that a recent spike in listings could mean things are looking up, the state was still found to be short by a whopping 76,000 homes last fall.
“A lack of sellers putting their houses on the market, lack of builders being able to build what they need to build at an affordable price, that’s what’s slowing down the market right now,” Cianchette said.
