How Big A Vote Will The Housing Market Have?
All of a sudden, the election doesn’t seem so far away, and the key states that are teetering may be swing back towards Obama as their housing markets show signs of life.
Key states see some improvement
An improving economy could significantly impact Obama’s chances of re-election — a Reuters review of 10 “key” states showed some positive movement in “even the most battered real estate markets, notably Florida, with some other key battlegrounds doing much better.”
The other states looked at by Reuters were: Arizona, Colorado, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania and Virginia. According to the report, the state of Virginia has seen an increase of 2.4 percent in home prices year over year. For Obama, that may mean good news, as a recent poll put him 8 points ahead of Romney in that state.
US News reported Jason Gold, director of the Progressive Policy Institute’s (PPI) “Rethinking U.S. Housing Policy Project noted
“this flattening implies that the ever important states that will determine the fall election are in the process of putting a floor under falling home prices.”
A lot can happen in a few months
Although there has been improvement of up to 3 percent in some of these swing states, the election is still nearly six months away. Whether the money from the National Settlement is going to the intended recipients, how much of a role Freddie Mac and Fannie Mae have and will have, and the fluctuating job market will all continue to bring pressure, positive and negative, on the housing market.
National boom, national crash, regional recovery
The Progressive Policy Institute maintains a “Battleground Home Values Index” — in the latest summary, they noted that Dr. Mark Zandi, Chief Economist, Moody’s Analytics, has “proclaimed the crash to be over,” while Ron Insana, Senior Analyst and Commentator, CNBC, and panel moderator, “added some geographic context to Zandi’s assertion, artfully describing the housing market as a “ ‘national boom, a national bust and a regional recovery.’ ”
Zandi goes on to say that in looking at the housing market recovery, the focus should be on “hitting singles,” and that when interest rates do finally begin to rise — and, yes, one day they will begin to go up — there will be a giant flurry of activity as buyers realize the days of sub-4 percent rates are disappearing.