The housing market could be the only segment of the economy not impacted by the looming election.
Presidential elections typically slow homebuying due to uncertainty about lending regulations and taxes in the coming term, but only five days from the election, housing is still hot. Typical home prices hovered at a record $350,000 for the week ending October 24, up $38,000 from the same week last year, according to Realtor.com.
“I don’t think the election is going to have much to do with the housing market. It's like a horse that has run out of the barn at about a hundred miles an hour and there's no stopping it,” Barbara Corcoran, founder and CEO of the Corcoran Group brokerage in NYC, and “Shark Tank” star, told Yahoo Finance. “It’s amazing. It’s almost like the strength [of the housing market] is beyond the election, that nobody’s paying attention.”
Homebuyer demand stayed at record highs last week, driven by record-low mortgage rates. Houses sold 14 days faster than they did a year ago, leaving 38% fewer houses listed for sale for the week ending October 24, according to Realtor.com. And mortgage applications were flat, increasing 1.7% that same week from the previous week, after slipping for four consecutive weeks prior, according to the Mortgage Brokers Association, a Washington D.C.-based real estate finance group.
“One of the main reasons why mortgage applications are down is because people can’t get their hands on the houses. For every two buyers, there’s one house to be had. So there’s an extreme slant in the market with a shortage of inventory,” said Corcoran.
Realtor.com’s director of economic research Javier Vivas warned that the housing boom could be slowing down following several weeks of stabilizing prices and inventory levels, but Corcoran said closings are a lagging indicator of the housing market and expects demand to continue at a frenzied level at least into early next year.
“The housing market is so hot I almost feel like I should apologize for it,” said Corcoran. “There’s too much pent-up demand, there’s too short of supply, and it’s going to take a while to even that score out.”
‘It’s not a pretty picture in the big-city markets’
But Corcoran acknowledges that it’s an uneven housing market and notes that her hometown of New York City tells a very different story as buyers leave the Big Apple for the suburbs.
“It’s a slanted strength because that’s not true of the coastal cities, and it’s certainly not true of New York City, which is taking it in the gut,” said Corcoran.
Condo sales in New York City were down 46% in the third quarter compared to the same time last year, while 27% more condos were listed for sale. Condos spent an average 143 days on the market, 57% longer than the same time last year, according to Douglas Elliman, a New York City-based brokerage.
“It’s not a pretty picture in the big-city markets at all,” said Corcoran, adding that other than the least expensive rentals and purchases, “90% of New York City is in the worst shape I have seen it in many many years.”
Condos sold for almost 9% less than the asking price in the third quarter compared to the 5% discount seen last year, and luxury homes discounted over 12% compared to just over 5% the same time last year, according to Douglas Elliman.
“If you’re a rich guy and you’re really dying to buy in New York City, now’s the time. You can go in and clip anything” for a substantial discount, said Corcoran.
Sarah Paynter is a reporter at Yahoo Finance.
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