How Presidential Elections Impact the Housing Market

Let's address the elephant in the room — we’re in the midst of an election year and you’re likely curious about the effect elections have on the housing market. Many assume elections have a negative impact, but the facts tell a different story.   According to the S&P CoreLogic Case-Shiller Home Price Index, home price appreciation during election years (4.84%) exceeds that of non-election years (4.44%) since 1987. Factors like supply and interest rates influence the housing market more significantly than presidential elections. For most people, election results have little direct effect on their income, so it shouldn’t impact their decision to buy or sell a home.   Additionally, mortgage rates tend to decrease leading up to presidential elections, which is great news for buyers as interest rates have been quite volatile for some time. Data from Freddie Mac shows that mortgage rates decreased leading up to 8 of the last 11 presidential elections. This trend can make buying a home more attractive during election years. Moreover, home sales typically increase after presidential elections. U.S. annual existing home sales went up after 9 of the last 11 presidential elections.   While presidential elections have some impact on the housing market, the effects tend to be small and temporary. Even so, listing your home sooner rather than later can be a strategic move if you aim to sell before the end of the year. As the presidential election draws closer, public attention will increasingly shift towards political events, potentially overshadowing the real estate market. This focus will intensify in the weeks leading up to November, making it a challenging period to attract buyers. Additionally, the holiday season that follows soon after is historically slow for home sales. Given that homes are currently staying on the market longer, delaying your listing could result in it hitting the market at a less opportune time and ultimately not selling as quickly as you’d like.    It’s important to work with an experienced real estate agent to ensure your home is priced right and looking its best to attract buyers so that you can position your home in a more favorable selling environment. So, if you want to sell this year, it is in your best interest to act now. For buyers, you should be monitoring interest rates and working with a reputable lender to ensure you are ready to act should rates come down as expected. Buying before the election instead of waiting until after means you will have less competition based on historical trends and more options as active inventory continues to increase.    At the end of the day, it always comes down to your particular situation and local market conditions. Feel free to reach out to discuss your real estate needs in more detail. We’re here to guide you and ensure you make informed decisions. 

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The Rental Market's Evolution from Short-Term to Mid-Term

The landscape of the rental market has undergone significant transformations, spurred by the introduction and rapid rise of Airbnb, which originally disrupted traditional travel with its short-term rental model. Initially, this model was highly lucrative for hosts and appealing to travelers seeking unique accommodations. However, the appeal has waned due to several challenges. Regulatory issues, neighborhood complaints, and an increasingly saturated market have led to a scenario often referred to as "Airbnbust." Despite this, Airbnb's platform-wide data from Q3 2023 shows resilience, with 113 million night and experience bookings (a 14% increase from the previous year), generating $18.3 billion in gross booking value (up 17% year-over-year) and $3.4 billion in revenue (up 18% year-over-year). For individual hosts,; however, the picture is less rosy. Data from AirDNA reveals that in 2023, STR (Short Term Rental) occupancy in the U.S. fell to 54.8%, down from 57.9% in 2022, and the number of listings surged by 17.2% year-over-year to 1.54 million properties. This increased competition has diluted profitability, making the Airbnb model less sustainable for many hosts. This backdrop has given rise to the popularity of mid-term rentals, which cater to individuals and professionals needing accommodation for several months rather than a few nights. This shift is supported by platforms like PadSplit, which offer furnished, affordable housing solutions for longer stays. Here are the key benefits of mid-term rentals compared to short-term options: Steady Income: Mid-term rentals offer more predictable and stable revenue streams, thanks to longer lease durations which help property owners better forecast earnings. Reduced Vacancy Rates: These rentals often attract tenants with work-related stays, providing more consistent demand and lower vacancy rates. Lower Operational Costs: The longer duration of stays reduces the frequency of tenant turnovers, thereby cutting costs related to guest acquisition, cleaning, and management. Regulatory Compliance: Mid-term rentals are less likely to be affected by the stringent regulations that cities are imposing on short-term rentals. This evolution in the rental market reflects a broader trend toward adapting to market challenges and demographic shifts. With rising mortgage rates (now over 7%), STR investors face increased pressure to maintain profitability. Transitioning to mid-term rentals offers a viable solution, allowing for higher net occupancy rates and improved financial outcomes. Furthermore, the pressing need for affordable housing remains a constant, irrespective of economic conditions. The current U.S. deficit stands at approximately 7 million affordable homes needed to accommodate low-income families. Platforms like PadSplit not only address this need, but also incentivize real estate investors to contribute to a solution that offers both social value and financial returns. In conclusion, as the rental market continues to evolve, mid-term rentals present a strategic pivot for investors looking to adapt to the changing dynamics and maintain profitability in a challenging economic landscape.

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Debunking a Real Estate Myth: Spring is the Best Time to Buy

When it comes to the real estate market, timing is often a topic of hot debate. A common misconception is that spring is the golden season to purchase your next property; however, this widely held belief overlooks the potential that lies in the off-season. As an experienced real estate broker, I've witnessed firsthand how buying outside the traditional spring season can yield significant benefits for both investors and homebuyers. The Myth of the Spring Buying Season Spring is traditionally seen as the prime time for real estate transactions. Families want to get settled before a new school year, there’s more time to shop for a home and the pleasant weather makes it easier to tour houses. While these factors do contribute to a surge in market activity, they don't necessarily translate to the best buying opportunities. Advantages of Buying in the Off-Season Reduced Competition: In the off-season, there are typically fewer buyers in the market. This decrease in competition can be a significant advantage. For example, you're less likely to find yourself in a bidding war and end up paying a higher purchase price to secure the home you want. The off-season allows for a more relaxed and thoughtful home-buying experience, which can be particularly beneficial for first-time buyers who may need more time and guidance through the process. Potential for Better Deals: Sellers who list their properties during the off-season are often motivated to sell quickly. This urgency can translate into more room for negotiation, potentially leading to a better deal than what you might secure during the peak buying season when properties are typically priced higher due to the increased demand. Quicker Transactions & Closings: During the off-season, there are fewer real estate transactions. Fewer transactions mean mortgage lenders have fewer loans to process, title and escrow companies have fewer closings and home inspectors have fewer inspections. When it takes less time to complete each of these steps in a typical home-buying process, it should lead to quicker transactions and closings for all parties involved.  Personalized Assistance: An experienced real estate agent knows how to adapt to the current season; however, during the slower winter months, your real estate agent typically has even more flexibility in their schedule, which can mean you benefit by having more undivided attention from a pro. Agents work hard all year, but with fewer clients shopping for homes, they have time to work even harder for you. Plus, these lower activity months for real estate sales also motivate agents to help you find the right home, negotiate the best deal for you, and close the transaction quickly. St. Augustine's Unique Market St. Augustine's real estate market has its unique characteristics. Our beautiful city attracts a diverse range of buyers, from retirees looking for a peaceful beachside community to young professionals seeking a vibrant, historic town. This diversity means that the market remains mostly active year-round, offering opportunities regardless of the season. While the off-season can offer distinct advantages, it's important to approach this period strategically. Market conditions can vary significantly based on local factors such as economic trends, employment rates, and even weather patterns. In St. Augustine, Florida, for example, the unique coastal environment and tourist seasons can influence the best times to buy. Conclusion While spring brings a buzz of activity to the real estate market, it's not the only time to find great deals. Buying in the off-season offers many advantages, including reduced competition, an easier process, and the potential for better pricing. As your dedicated real estate professional in St. Augustine, I am committed to helping you find the perfect property, no matter the season. Let's explore the opportunities that await you in our beautiful city.

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