Are You Moving to Canada?

  • 8 years ago
  • Blog
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There’s no doubt about it, elections are a strain on our emotions.  But the reality of the effect of elections on our individual lives is debatable. Despite all the stress and worry leading up to elections, measured with claims like “If Trump gets elected, I’m moving to Canada” or “With those tax policies, we’re going to run this country into the grave,” the reality is that it might not matter as much as we want to believe.

Sure, there’s about 45% of us that probably think Trump is an idiot, but it doesn’t matter that much.  We’re not going to all wake up on Inauguration Day and lose our jobs, get an instant tax cut, or have free college tuition.  The founding fathers created this system based on checks and balances, and despite our worries, change happens a lot slower than we fear.  So what typically happens after an election?

Traditionally stocks have below average years the first two years after an election, and above average returns the two years leading up to the election.  According to Kiplinger’s Personal Finance “When it comes to your portfolio, it doesn’t matter much which party wins the White House. Conventional wisdom might suggest that Republicans, who are supposedly more business-friendly than the Democrats, would be more beneficial for your stock holdings. In fact, looking back to 1900, Democrats have been slightly better for stocks, with the Dow up an average of nearly 9% annually when the Democrats are in control, compared with nearly 6% per year during Republican administrations.”

For California Real Estate, the reality is the same. In a study released by CAR, things aren’t what most pessimists fear.  According the the California Association of Realtors, “In an analysis of home sales dating back to 1990, the average growth in home sales during an election year is usually either slightly higher or lower each month than in non-presidential election years. Notably, sales growth is rarely negative during an election year, and there is no evidence of a systematic negative impact on home sales or prices stemming from election season. In fact, C.A.R. found that growth in home sales at the end of an election year actually outperforms non-election years by 7.1 percentage points.  On a monthly basis since 1990, California home sales contracted by roughly 2 percent during the last four months of the year. However, during the past five election cycles, sales in the final months of the year picked up, rising by 5.3 percent on average compared with -1.8 percent during non-election years. With the exception of December 2004, every single month of the final quarter saw robust growth in home sales during election years.”

What about interest rates? Volatility certainly can affect rates, but ultimately, the market will likely settle and rates will stabilize. Rates have more to do with how the economy is performing as opposed to who is in office. The consensus among lenders is that rates will rise 1/2 to 3/4 of a point over the next 12 months as long as job growth continues.

So when it seems like the world may have been tipped on its axis, know that life goes on regardless of who is in office.  The real fabric of America has always been made up of the citizens and not just the elect.

If you are still in doubt and thinking Canada is your best option, do know that it may take 6 to 12 months to earn entry as a skilled worker.  That gives you plenty of time to get your house ready to sell and for now, it’s as good a time as any to sell your home – just give me a call.

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