We’re all still reeling from last night, but Realtor.com Chief Economist Jonathan Smoke had some words to offer Americans. While we have had a pretty stellar seller’s market with home values soaring at unprecedented prices for so long, we were kind of due for a correction anyway.
“The lead-up to the election had no impact on home sales or demand; pent-up demand, historically low mortgage rates, relatively strong job creation, and significant demographic tailwinds created the best real estate market in a decade,” Smoke said. “Because our November elections come at one of the slowest time of the year for sales, it’s unlikely we will see much disruption to the normal seasonal pattern. However, if the outcome has a big impact on financial markets that lasts more than a few days, we could see some disruption beyond the usual seasonal decline. Unfortunately we don’t have a comparable period in history with good data to draw any sharper conclusions.”
Well, there was that little freakout last night in which the Dow futures fell by around 800 points … but by Hillary’s concession speech, things were leveling out.
However, there are many other variables at play in the market, Smoke notes, particularly interest rates.
“It looks as though rates will fall, but the market moves today are already indicating that financial markets are pondering that the Trump effect could be positive for the economy,” he said. “We have almost five weeks before the December Federal Open Market Committee (FOMC) meeting, which will give the market plenty of time to digest the potential outcomes. While the market is now indicating a reduced probability of a short-term rate hike at that meeting, the Fed has repeatedly indicated that they would be data-driven in their decision. So, if markets calm down and November employment data look solid on December 2, a rate hike could still happen.”
