The Presidential Election and The Real Estate Market

Keeping Current Matters The Presidential Election and Its Impact on Housing

Every four years, as things start to heat up on the Campaign Trail, we get inquiries from our clients about what the election will mean for the market. It used the be the case here in Northern VA, that we would see a period of pausing, followed by a potential great transition and turnover of homes if a new party was elected to office.

Now that our economy in Northern VA is not solely reliant on the federal government, that is no longer the case. While we still have many government employees, government contractors and elected officials living here – we also have many large companies (for example tech firms), as well as many entrepreneurs and small business owners, many in the service industries.

CEO The Belt Team“If you’re thinking of buying or selling, give us a call, ” said Terry Belt, CEO of The Belt Team. We’ve been through every election cycle in Northern VA since 1972. In fact, a Presidential Election is part of what brought our family here from California. We’d be happy to share our expertise with you. Each Buyer and Seller faces a unique situation. And the conclusion about timing is not always black and white. Call us at (703) 242-3975.”

In the meantime, if you have been wondering about the market, you’ll want to read what our friends at Keeping Current Matters have to say. They gathered input and predictions from a variety of sources.


Every four years people question what effect the Presidential election might have on the national housing market. Let’s take a look at what is currently taking place. The New York Times ran an article earlier this week where they explained:

A growing body of research shows that during presidential election years — particularly ones like this when there is such uncertainty about the nation’s future — industry becomes almost paralyzed. A look at the last several dozen election cycles shows that during the final year of a presidential term, big corporate investments are routinely postponed, and big deals are put on the back burner.

The research is even more persuasive on the final year of an eight-year presidential term, when a new candidate inevitably will become president.

We are seeing this take form in the latest economic numbers. However, will this lead to a slowdown in the housing market? Not according to Fannie Mae, Freddie Mac or the National Association of Realtors.

The Impact on Housing Throughout 2016 : Let’s look at what has happened and what is projected to happen by these three major entities.

National Association of Realtors
“In spite of deficient supply levels, stock market volatility and the paltry economic growth seen so far this year, the housing market did show resilience and had its best first quarter of existing-sales since 2007.”

Freddie Mac
“Recent data darkened the growth outlook for the first quarter of 2016. However, despite the disappointing economic reports, we still forecast housing to maintain its momentum in 2016.”

Fannie Mae
“Consumers and businesses showed caution at the end of the first quarter…(but) Home sales are expected to pick up heading into the spring season amid the backdrop of declining mortgage rates, rising pending home sales and purchase mortgage applications, and continued easing of lending standards on residential mortgage loans.”

Bottom Line
Even during this election year, the desire to achieve the American Dream is greater than the fear of uncertainty of the next presidency.

Crystal Ball Forecast for The 2016 Northern VA Real Estate Market

Northern VA Real Estate Forecast 2016

But we’re going to do it anyway!

At this time of year, our phone starts ringing off the hook looking for our CEO, Terry Belt, asking for his forecast of what this year in real estate will hold. And while his crystal ball may be as imperfect as everyone else’s, he has weathered 28 years in the Northern VA real estate market and done it uber successfully. This brings with it a good look in the rear view window, but at the same time an ability to spot & react to trends quickly.

Realtor The Belt Team     Real Estate Predictions

Here are Terry Belt’s Top Predictions For The 2016 Northern VA Real Estate Market

  • Over all, we’ll see a good year in Northern VA. The national and local press are all telling “feel good” real estate stories and this is great as it resonates positively for consumer confidence, which is a huge factor in the market.
  • The first half of the year will bring a very healthy market. I predict the second half of the year will soften as inventory grows.
  • We will see slower appreciation than we have seen the past 5 years. Statistics for the past five years for various Northern VA markets are on our web site:

(FREE – How Much Is My Home Worth)

Wild Cards – Things To Watch: 

  • Interest rates (already up once and likely to continue rising)
  • Stock market
  • Job creation, especially locally where we are trailing the nation
  • Inventory

(Our FREE state-of-the-art buyer search site)

My Advice To 2016 Buyers & Sellers:

If you’re thinking about buying or selling a home in 2016, the absolute most important thing you can do is to make sure you have the best Realtor representing & advocating for you. There’s a lot to navigate along the way – appraisals, surveys, legal disclosures, when to sell, how to price, how to stage, what to disclose, what not to disclose, mortgage financing, how to compete and more. Every market has its own ins & outs & idiosyncrasies.

According to NAR, 90% of homes are sold by 10% of the Realtors. So my advice to clients, whether they are buying here in Northern VA or across the country in California or even across the ocean in Europe – is to make sure you work with the best. You know they’re the best when they’re in that top echelon of performers. The more transactions a team does, the more prepared they are to be your advocate and help you navigate successfully.

Buying or selling a home is often one of the biggest, if not THE biggest, financial transactions of your lifetime – not to mention the emotional importance of your home and family. Do it right!

Crystal Ball Predictions for The Northern VA Real Estate Market

Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.” Peter Drucker

But we’re going to do it anyway!

At this time of year, our phone starts ringing off the hook looking for our CEO, Terry Belt, asking for his forecast of what this year in real estate will hold. And while his crystal ball may be as imperfect as everyone else’s, he has weathered 27 years in the Northern VA real estate market and done it uber successfully. This brings with it a good look in the rear view window, but at the same time an ability to spot & react to trends quickly.

Realtor The Belt Team     Real Estate Predictions

Here are Terry Belt’s Top 3 Predictions For Northern VA Real Estate in 2014:

1. Buyers Will Continue To Compete For Homes

Last year Northern Virginia experienced a market where housing inventory was low year round. Inventory rose slightly during the Spring, but pent up demand meant that many of the homes were snapped up as they hit the market. I expect that to continue in 2014. Although we experienced a market where buyers were competing for homes back in the 90’s and again at the height of the market in 2006, this market is different in that the number of homes selling is much less. Homes sold quickly in those earlier markets, but new homes came on the market to replace them. Currently, we still have demand left over from the downturn, as well as new purchasers entering the market, and there are large numbers of buyers just sitting and waiting for homes to come on the market. Many of these buyers have been looking for months & months. The number of homes coming on the market just cannot keep up with the demand.

The question will be whether that will continue to drive up prices or whether rising interest rates will price some of these buyers out of the market. Keep in mind that a 1% rise in interest rates equals a 10% decrease in home price affordability. Stay tuned to see how that plays out. In the immediate short term, look for early Spring market conditions to be very similar to 2013.

(Our FREE state-of-the-art buyer search site)

2. More Northern VA Homeowners Will Emerge From Underwater

Home prices in Northern VA continued to rise last year and I believe this trend will continue in 2014. From 2011 to 2012, the median price rose 4.82%. And from 2012 to 2013, the median price rose 7.13%. This is good news for homeowners who were underwater. If you tried to sell unsuccessfully during the years 2008-2011, your golden ticket may just be cashed this year.

(FREE – How Much Is My Home Worth)

3. Interest Rates Will Rise, But Mortgages May Be More Accessible

For several years, we have had interest rates at historical lows. This will not last. In fact, we have already seen rates rising. While this may price some buyers out of the market, it actually may work in reverse for other buyers. The silver lining to rising interest rates is that means less refinancing business for lenders; and that may result in lenders loosening their standards in order to compete. Just this week, we were notified by several of our lenders of new programs they are offering that are more flexible than what we have seen over the past few years.

Wild Cards: 

  • If home prices continue upward and more sellers put their homes on the market, this could help alleviate the low inventory problem for buyers adding a little more balance to the market. 
  • The market will continue to do well if the local economy and jobs remain positive.  Should this change it would have a slowing effect on housing.

My Advice To 2014 Buyers & Sellers:

If you’re thinking about buying or selling a home in 2014, the absolute most important thing you can do is to make sure you have the best Realtor representing & advocating for you. There’s a lot to navigate along the way – appraisals, surveys, legal disclosures, when to sell, how to price, how to stage, what to disclose, what not to disclose, mortgage financing, how to compete and more. Every market has its own ins & outs & idiosyncrasies.

According to NAR, 90% of homes are sold by 10% of the Realtors. So my advice to clients, whether they are buying here in Northern VA or across the country in California or even across the ocean in Europe – is to make sure you work with the best. You know they’re the best when they’re in that top echelon of performers. The more transactions a team does, the more prepared they are to be your advocate and help you navigate successfully.

Buying or selling a home is often one of the biggest, if not THE biggest, financial transactions of your lifetime – not to mention the emotional importance of your home and family. Do it right!