Election Pause?

Many real estate professionals claim that there is always a hiccup in the market before an election, as people try to figure out what will happen in either scenario. It's not clear to me that it's happening this time, although you couldn't have a starker contrast between two candidates than we are being presented with this time!

One thing that is clear is that interest rates are never lower than before an election, especially in a presidential election year.  This time is certainly no exception, and that should spur action under any vision of the future.  Over the long run, it matters more what your interest rate is than what you pay for the property, within a certain range. 

Besides, how do we even know which candidate Wall Street will favor?  Hillary has most of their contributions, and Trump is a businessman, like most of those running big companies.  Either one should have their fair share of support, meaning that the stock market should not react wildly to either outcome. 

Well, here's one time when I'm clearly on the line, since we only have two weeks to go, before we find out what happens.  In the meantime, go forth and buy or sell--you should be fine, in any event!

Heading into the Election

Some things change from election to election, but some things don't seem to vary.  One constant is that the sitting President, and his party, try to make the economy look as good as possible, for obvious reasons.  My friend Ray Fair, in his economic research, has a regression model showing that the incumbent is heavily favored, and statistically almost certain to win, if the economy is good or improving.  By those odds, Obama would seem to have the advantage, at least if you are talking to real estate professionals (although they are much more likely to be Republicans in general!).

And how does a President, or the legislative branch, go about making the economy look better?  One way is to make sure that interest rates don't go up.  As we have seen, they have just gone down again, and are now at their lowest rate in 60 years.

For commercial real estate, that means that both investors and users should be looking for product now.  They cannot count on getting the kind of financial help that low interest rates provide for much beyond the election.  Given the length of time that it's been taking to close a commercial transaction, time is of the essence.  Act now!