Election Years and Home Prices

It's August 2012 and we're just a few months from another presidential election.  Of course, nowadays, there are other factors that are strongly influencing home prices besides the upcoming election.  Nevertheless, I thought it might be interesting to see what influence pending elections had on real estate prices, historically.

Well, election years, both presidential and mid-term, are bad for price appreciation.  The uncertainty of the future causes people to sit tight and wait.  In these big election years, U.S. home prices averaged 5.2% gains per year. In non-election years the average gain has been 5.8% since 1969.  When you look at median prices, you get similar results.  Non-election years outperformed election years handily: 6.3% annual gains vs. 5.1%

So, what about the other years in the election cycle?  How do they compare to the presidential election year?

• Gains in the year of the presidential election averaged 4.5%
• In the year after a presidential election — that first year of a new White House term — U.S. home prices averaged 5.5% gains.  Not bad.
• In the next year, the year of the mid-terms, gains averaged 5.9%
• The third year of the president's term is where you see the best gains, historically.  This third year has averaged 6.1% since 1969.

I'm not sure what value this has since the crash of real estate prices in Florida a few years ago, but it's something to consider as we approach the election.  Certainly, buyers of Marco Island homes and condos are not considering anything but grabbing some real estate at rock bottom prices.