Look, it's an appraiser, it's a podcaster, it's a chart maker. It's Jonathan Miller!
No. But please read on.
It's been a while since I've placed a chart of Curbed DC, and even longer since I was politically correct (but hey, I'm really trying). With the RNC underway and DNC up next, I thought I'd try to find some sort of correlation to the DC Metro housing market that coincides with the party of the president voted into office and their slogan/theme. Obviously the elections aren't all about housing, but housing is very important in terms of its economic impact and "Wealth Effect" influence" on the US economy. Doh! I looked at MRIS' awesome online resources and thought that new listing history might tell the story - I clearly went overboard so please indulge me.
My thinking was new listings reflect people placing listings on the market in reaction to their view or opportunity with the world around them. Job transfer, lost job, trading up, cashing out, etc.
I tracked the month-over-month percent change in the number of new listings that enter the market this month and showed the July to January change in new listings during election years. The historical data is limited to mid-Clinton era (wanted to go back to GW) so arguably this is NOT a large enough data set to be credible for this type of analysis, but hey this is Curbed and its intended only to be food for thought.
January is typically the month for a fresh outlook on housing and anticipation of the coming spring market, the strongest housing market of the year.
Here are a few observations:
- The Clinton-Bush II transition saw the largest election year increase (45.3%) in new listings as we were drifting towards a recession in the following year.
- The Bush II re-election transition saw the smallest election year increase (25.4%) in new listings. Housing prices were spiking and we were in full bubble mania as the Fed began to press interest rates higher.
- The Bush II-Obama transition was in the middle (34.4%). The credit crunch rapidly accelerated with the collapse of Lehman Brothers in the fall and a sharp drop in home values kept many from selling.
New listings clearly spike in January EVERY year but the spikes are much higher in non-election years. My takeaway and perhaps the biggest point of this exercise is that people don't like a lot of change when it comes to housing and an election year, a re-election year casts uncertainty over the coming year.
I suspect new inventory entering the market will be very low for two reasons:
- It's an election year.
- Low home equity is keeping potential sellers from selling because fewer can buy trade-up, keeping inventory low (more on that in a future post).
Housing-related Campaign Slogan Ideas:
Democrat: "We'll Try Not To Make Mortgage Lending Any Tighter Than Its Current Historical High."
Republican: "We Screwed Up Housing Last Time, So We Clearly Know What to Fix."
My takeaway from this election year is that both campaigns don't know how to address what ails housing nationally. We've got many other important problems but housing is an economic lynchpin to recovery. Since the DMV remains one of the best housing markets in the country, the DC political establishment might be spending more time here to avoid their housing constituents at home.
Policies pushed by both political parties during the terms of all four presidents were the primary ingredients for the recent housing market meltdown and there's no catchy slogan for that.
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