I was chatting with another broker yesterday, who commented that market activity seemed slower than usual for October. I agreed, and added that I thought the reason was the tight inventory, particularly in the most popular second home categories. Typically, the period from mid September to mid November is the busiest time here for putting together deals. A lot of buyers, especially in the second home segment, do a lot of exploring and looking over the summer, getting a lay of the land and narrowing down their options, and then get serious about buying after Labor Day. I’ve seen some post Labor Day pickup, but haven’t put together the number of deals I usually do this time of year. I chalked it up to tight inventory; that there just haven’t been enough good listings in popular categories to entice buyers to push the buy button. I have about a dozen clients on the hunt for farmhouses or lakefront houses in the moderate price range, as well as handful looking for larger log, barn or post and beam homes with budgets upwards of $500,000 — but the pickings in these categories have been very slim.
The other broker, though, said he didn’t think that was the whole reason. He said that this is a presidential election year, and in the two dozens years he’s been selling real estate, he’s observed that there’s always a slump leading up to a presidential election. He’s right, and I recall blogging about that around the last couple of elections. I don’t this it matters which party is likely to occupy the White House. Big elections ferment uncertainty. Fueling that are modern campaign strategies that are largely based on painting a doom and gloom Armageddon picture of America’s future if the other candidate is elected. While the vitriol and street brawling between the presidential contenders this year has reached a new low that makes World Wide Wrestling look tame, the strategy isn’t markedly different. So for months we’ve been bombarded with doom and gloom messages that, consciously or not, chip away at optimism. Optimism, along with the belief that that the future is stable, is a key driver of major purchase decisions. So is there an ‘election year effect’ on the real estate market here? Probably, although there isn’t an easy way to isolate that variable.