Raising the Flipping Bar with Derek Marlin

What Happens to the Housing Market After the Elections?

• Derek Marlin • Season 3 • Episode 39

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Want to know how the recent election will impact the real estate market? Are you curious about how to navigate the post-election real estate landscape? Stick around, because I've got the solution to help you make informed investment decisions and proactive business strategies in the ever-changing market. 

In this episode, you will be able to:

  • Understand the Impact of Elections on the Housing Market to make informed investment decisions and navigate the post-election real estate landscape.
  • Implement Proactive Real Estate Investment Strategies post-election to capitalize on potential market shifts and maximize returns.
  • Explore How Interest Rates Influence Real Estate to adapt your investment approach and take advantage of favorable market conditions.
  • Learn How Political Changes Affect Real Estate to stay ahead of the curve and make strategic decisions in response to evolving economic and policy landscapes.
  • Discover Effective Ways to Build Wealth Through Real Estate Investing by leveraging insights into the market and identifying lucrative opportunities for growth.


Let's dive in and uncover the impact of elections on the housing market and real estate investment strategies post-election!


References:

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Hey, everybody. Welcome back to another episode of Raising the Flipping Bar. I'm your host, Derek Marlin. And I'm excited for today's episode. And I know now that I'm thinking, about this and I'm saying this out loud, I say that for every episode, maybe one day I'll say I'm not excited, but, but today I am. The reason is, is this is the first episode right after the election. I know people are tired. I know people are excited. I know some people are freaked out and I'm not really here to kind of take one side or the other, but what I'm here to talk about is how we can all move forward. So in today's episode, you're going to get some hard data about what happens to the housing market, regardless of which candidate wins Democrat, Republican, independent, whatever. We're going to talk hard facts. We're going to talk about data. We're also going to give you some practical tips. On how you can move your business forward, how you can move your investing career forward or your agency business forward. So let's jump in. Welcome to Raising the Flipping Bar, the go to podcast for aspiring and seasoned real estate investors. I'm your host, Derek Marlin, and I'm the CEO of Elevation. We're a real estate investment company based right here in Denver, Colorado. We'll dive into smart investment strategies, market insights, and essential tips for scaling your real estate ventures. Whether you're making your first investment or your hundredth investment, this podcast is your blueprint for success in the ever evolving world of real estate investing. Get ready to elevate your real estate game and begin your journey with me. www. elevation. com And what we like to do when we start episodes is, is if there's a story that I can tell, hopefully it makes it interesting for you guys listening out there, but I want to give you kind of this kind of cool, unique little snapshot. So this episode will come out the very next week after the election. I want to backtrack a. About six weeks ago, and we had this interesting little mini social experiment in my family and what it was is actually as an aside, hands down one of the best things I've ever been able to do with my kids. I've got three teenagers, one we just sent off to college at Western Washington University. And what we did with our son is I drove him from Denver all the way up to Bellingham, Washington. So that's a 23 hour drive. It's really cool because I'm actually looking at my notes cause we drove through so many states. We went through obviously Colorado, we hit Wyoming, we hit Idaho, we hit Utah, a little bit of Oregon, and we finally got into Washington. And the interesting thing is, and I'll have to find a picture maybe to post in our video display of this podcast. But Our son is amazing. His name's Wes, and he normally would rock this giant fro, like super huge strong fro, and he kind of got tired right towards the end of his summer and said, you know what? I'm just going to buzz my hair. So he buzzed his head. We didn't know he was going to dye his hair platinum, and we really didn't know that he was going to put a spiderweb design in his head. Again, Pause for dramatic effect. Hopefully all these parents can agree with me that sometimes you're like, what the hell are we doing here? But the funny thing was, is it created this crazy little social experiment with politics. And so this is how I want to kick off today's episode. As we drove out of Colorado and hit certain conservative States, You know, my son got these crazy dirty looks, he got, you know, talk under the breath at every different gas station that we would stop at. And then when we got into, more quote unquote liberal states or states where people, have that different appearance, places like Oregon, definitely Washington, it went from dirty looks to, you know, to, hey, cool hair, bro. It was so interesting for me to see this change and transformation, but for us, it was all about kind of the urban versus rural way that, that, you look at society and we look at how our elections are run. And for me, it's all about how do you really move forward? So again, I'm not here to say whether you're pro Trump, pro Harris, whatever. I don't really give a crap about that. What I want to do is talk about. How we're able to translate this into moving forward and being positive. Cause again, it's all about perspective in one aspect, you're having people talk crap about you and other aspect, you become this cool person. It's all about perspective. So as we jump into today's episode, let's talk about facts. And what I want to talk about. is the value of property increasing after every single election. Definitely check the show notes. We've got about six or seven different sources. I try to pull as much data from all these different sources as possible. Try to get as much on the left as much on the right to give you guys good context on what's going on. So I want to talk about an article from bankrate. com and what this displays is two different things. The first thing is despite common beliefs, everybody thinks that the housing market is predicated on going up. If one candidate is in versus another, and that's actually not true. And so they looked back and they base everything on the case Schiller home index. And so that's from the early eighties. So at least tracking back to the early 1980s. The very next year after presidential election, no matter who gets elected prices go up. The only caveat to that was obviously 2008. We all know what happened in 2008. There was a massive housing crash and a housing crisis. But the interesting thing is I went and looked back and the year beforehand, when everything was really starting to go to hell in a handbasket in 2008, and then that result in 2009, Prices were down 12 percent the following year to kind of keep that trend, on point with the rest of the data I'm sharing with you guys, it was only down 3. 46%. So even though it was down in that one time, it was actually down a lot less. And we all know that housing prices across the country tanked significantly. The other thing is, is it showed that there are key drivers that actually affect housing. So this is kind of a compilation of some of the other episodes that we've had, but number one is supply and demand. That's what typically affects the housing price. It's not whether a Republican is an office or a Democrat or an independent or whatever. It's supply and demand is typically the number one metric to help you figure out our price is going to accelerate or decelerate then kind of one a, especially in our, our current market environment, our interest rates, obviously, interest rates have been all over the board since the 1980s through the 90s, 2000s. And as we sit, right now, today. interest rates play a huge factor. The third thing is job growth and the strength of the overall local economy. So really you should be keying in onto those three different things and not be quite as worried again, from a, an economic standpoint. From where your business might go. I want to be sensitive. I know that people have very, very deep passions of, of what your candidate brings to you from, in my opinion, let's call it a social aspect. Again, I don't want to skirt that under the rug, but I do want to focus on, to me, what we're talking about on this podcast, which is building wealth through real estate. And that's the crazy thing is I thought there's got to be, whether it was post Clinton, whether it was post Obama, whether it was, Bush, there had to be all these variances and it was just 2008 during the housing crash. Every single time appreciation happened and home prices went up. And so if we kind of go back to that case Shiller index that I talked about, this is this home index that came out in the mid 1980s and 1986 actually to be specific. And the average post election increase, again, this is nationwide. So for Denver, I wasn't able to actually find this because I literally recorded this one day from the night the election ended to us recording this today. So I'll, I'll get you guys some follow up and some Denver and Colorado market data, but the average post election increase was 4.84%. And that even takes into account the decrease of 12% in 2008 and 2009. So on average, it actually would have been a lot more, but that number of drag, this whole thing down. So again, here's what I think is, I think that elections 100 percent do affect people's activities, people's motivation, people's mindset. And so really we found so many people, as you guys know, that listen to the podcast, we do a lot of cold calling as our main business development tool. We talked to so many sellers over the last year that just said, you know what? I'm just going to wait for the election. And I don't really honestly know what the hell that meant. We would try to dig deeper, but it was this perfect, let's just call it what it is. It was an excuse at the time for them not to sell. And so what we're doing, and I want you guys to use this as a key takeaway, everybody that is in real estate and sales needs to now use this as the opportunity that the quote unquote election. Being the thing that's holding you guys up from selling or buying. Well, obviously that's gone. So now you can get to the real motivation, the real pain point. You can be a creative problem solver. Like we are here at elevation and you can figure out what the hell do they really want to do? What's really holding them up and solve those problems and either help your clients. help your folks selling properties and hopefully increase your transaction volume. So to me, the number one takeaway of today's episode is honestly, that excuse is out the window. So obviously it's happened. We all woke up the next day. I'm really happy that things seem to be peaceful. I mean, again, no matter which side of the aisle you're on, that to me is obviously super important, but this uncertainty, there's another article that we'll have in our sources and that cited is. To me, uncertainty is the biggest reason for major purchase decisions. So whether it's a house, whether it's a car, whether it's making major investments, I mean, obviously the stock market the next day was up 1500 points, the biggest gain in the history of the stock market the day after an election. And that dates back to the start of the New York stock exchange, obviously people buying and selling businesses. So like major purchases, people were holding off. And I think that is going to be something that you're going to see. So again, whether you love them or whether you hate them, there's this guy out there, Ryan Serhant. He's freaking awesome at creating content. He runs a very big brokerage in New York city. He's been on TV, done all that fun stuff. But what I think that was interesting is I'm going to read you a quote from Ryan Serhant, because I think it's really, really telling of like, what is the consumer mindset right now around real estate? And so he says, Inventory is up. We obviously know that not only in Denver, but all across the country, interest rates are at 20 month lows. that has spiked just a little bit. This article came out about 10 days ago, so that has spiked a little bit. But in general, interest rates are obviously lower than they were a year ago. And he says, people are waiting. They want to see if deals are going to come. Nobody wants to catch a falling knife. We say that again, nobody wants to catch a falling knife. And I totally agree with that. He said, but also no one wants to jump into a speeding car. So it is, it's trying to quote unquote, time the market, which is what some people are doing. He had that on a Fox news broadcast. And so for me, that's something very telling that again, there's this apprehension there, things are trending in the right direction. I see this as a huge opportunity and so what I want to do now is kind of shift gears and I want to talk about how can you take some of this data, how can you work on your mindset and how can you shift moving forward to driving more business for you and for your company? Dealing with hard money lenders is the biggest headache real estate investors have. I thought that's just how hard money had to be until I met backflip. Backflip is changing the lending game by actually making loans stress free. And I know this firsthand because I personally use them for my own deals. Let me tell you, their free app makes real estate investing effortless. With just a few taps, I can apply for loans tailored exactly to my needs, whether it's low interest rates, high leverage, or even deferred payments. The best part, I can secure financing less than two weeks, making it easier to scale my business and close. More profitable deals, but it doesn't stop there. Backlip instantly provides all the data I need to estimate profits, including a curated list of high quality comps, saving me hours of work. Unlike other lenders who disappear after funding, Backlip is a true partner for Elevation. Their team is always just a call away and ready to answer any questions and offer support. With Backlip, you get the data and the cash you need to jump on good investments quickly and with confidence. Click the link in the show notes to download the free app. Now let's get back to the show. So really what I want to dive into is how is this an opportunity? And to me, the number one opportunity is we talk about overall transactional volume. So we're going to finish 2024 with between 3. 8 and 3. 9 million transactions. Total sales transactions across the country. I look back and data wise, this is actually less transactional volume than 2008. And so really the big takeaway is there's going to be so much more volume and that's going to be great for business in general, whether you're a flipper like us, whether you're wholesaling, whether you're working traditional brokerage, commercial, whatever. Volume is going to be up. And so that's going to be huge. Again, I really tried to research both candidates policies kind of in preparation for this episode and there's pros and cons to each. Obviously as we record this, Trump is coming back into office. And so I think again, there's some pros as it relates to real estate. We know that the president cannot affect interest rates, but we also know behind the scenes that they do have a little bit of, of pull where the fed goes. So hopefully rates will come down and we'll be able to have more transactional volume. So again, I think there's a lot of pros and cons, but there's checks and balances in our country, obviously too. So it's not like things are going to just immediately like kick into gear, whether you were for Trump or whether you were for Harris. But for me, we're also going to be closely tracking interest rates. I think that's the number one. driver of opening up even more volume. Is that just mental capacity for people to have, you know, either a lower six in their interest rate or ideally, hopefully a five on their interest rate. I would be super excited if it was in the fours, but I don't think that's going to happen anytime soon for a number of different reasons. The other thing we're closely tracking is we're in very good touch with the institutional buyers. And so once those rates trend down, they're able to buy in cash, refi at a good rate and hold those rental properties and build up their portfolios. And so that's something that we'll keep you guys abreast of, what they're doing cause they kind of have more data and more inside information, if you will, than us as the individual investor. And so with those institutional clients, it's not going to go back to the volume of 2021 and 2022. We were looking at two and 3 percent interest rates. And so again, if we have that, go back to my episode with Kevin Amos, there's a whole different show. That's going to go on in a big batch of problems if we're back to two and 3 percent interest rates. So I think it'll get closer to that five, maybe hopefully 4 percent rate. So keep an eye out for that. You can also go back and listen to my episode of Main street being owned by wall street. And I'm sure a lot of people are pissed off saying, well, I don't want to go back to bidding wars. My clients lost out on homes. You know, it was those hedge funds, really people that own 1000 homes or more only own 1 percent of the housing stock in this country. So again, it's just something to keep an eye on from a data perspective. Cause usually hedge fund managers, institutional clients, private equity clients, they have so much research, so much data, really, really smart, quants working for them. And so just use that as a way that you can help kind of tap into a way to, to grow and, or pivot your business when other people aren't looking at that data. As we kind of wrap up, this is obviously a quick episode. I want to give you some takeaways as we come to a conclusion on this episode of raising the flipping bar. We've talked about investment strategies. We've talked about, to me, I think mindset. is honestly the number one most important thing to also take away from this episode. And to me, I actually go back to the philosophy of stoicism. And if you haven't read it, Ryan holiday has written an amazing book and it's called the obstacle is the way. And he has another great book called the daily stoic. And it's just about quotes and it's about great leaders. During that time of stoicism being super important as the world was forming and developing. And obviously they were going through a hell of a lot worse conditions than we are going through right now. There was political corruption. I'm sure a lot of you are screaming there still is now. That's not the point. Again, it's all about your mindset. Marcus Aurelius was a great, emperor and a great ruler of Rome. And so I'm going to read you a quote from him. Cause again, it's all about, what is your mindset and how do you move forward in a positive direction? Cause we can't just like At least my opinion, you shouldn't just hang it up. You shouldn't stop doing business. We've got to wake up and we've got to move forward. There's been a lot worse times. Our country has dug itself out of a lot worse economic situations and we have to move forward because if not, what the hell is the point? So I want to read you guys this quote. He says, if you're distressed by anything external, the pain is not due to the thing itself, but to your estimate of it. And you have the power to revoke at any moment. So to me, what that says is, is we can't control what happens to us. We can only control our actions and our attitudes moving forward. Let me say that again. You cannot control what happens to you. You can only control how the hell you act and what you do moving forward. And so it's something that to me is super, super important. And I kind of come back to this. And again, as you guys can hear, it's funny. I'm like, feel like I'm literally in physically on my soapbox recording this episode. But to me, affect something in your local community that actually adds value to people in and around you and where you live. Volunteer. I'm getting ready to go with my family. My teenage daughters are going to be super pissed because they're brothers at college, but we're volunteering with this cool organization. We've been doing stuff with for a little while. Shout out to an organization called a little help. And it helps seniors and older adults age gracefully in their home. And so we're going to go do a bunch of yard work for people that need our help. Like it makes you feel better. It's something that obviously helps people in your community, whether you're candidate one or your candidate lost, you can't. really do anything about it unless you voted, which was obviously super important. So it's how do you move forward? So go out and volunteer. The other thing that we just did is we had this really cool field trip with the students from the epic campus and that's through Littleton public schools. We kind of support people as we say it at both ends of the age spectrum. And these are these bad ass students and they're entrepreneurs and they're in the real estate program and they're trying to figure out if they want to make real estate a career. And so we had 40 kids in our building at the Broadway collective and taught them about flea taught him about investing in real estate, how to build wealth, just give back. So again, I'll get off the soapbox, but to me, it's all about having that growth mindset, having kind of a stoic attitude, but maybe sometimes things don't go your way. And how do we move forward? Because whether you're, agreeing or not, The market will move without you. And so definitely go to the show notes, check out all the references that we've got to me. It's obviously very important from a fact checking standpoint. And the other thing is we've got a lot of events going on. So check out the show notes. We've got, two different meetups coming up at the Broadway collective in later November and December, we're going to be doing a lot of extra content. So definitely check back in with us. And as we always say, Connect with us, engage, follow us, whether it's on Instagram, whether it's on YouTube, definitely check the show notes and connect with us. Cause I would love to hear your opinion. I think there's been some great debate, obviously on the political side of the spectrum. So I want to see what you guys think, how this affects the housing market, how this affects real estate in general. So thanks for tuning in for a quick episode and we will catch you guys on the flip side. Thanks for tuning into this week's episode of raising the flipping bar. If you found value in our insights and stories, let's keep the conversation going, connect with me on social media, and be sure to share this episode with friends or colleagues who might benefit your feedback and reviews, help us grow and reach more listeners like you. So please, if you enjoyed this episode, leave us a review. Thanks again to the elevation Academy for sponsoring today's show. If you're interested in learning more, click the link in the show notes below and remember every property tells a story. Every deal brings a lesson. Keep reaching for those goals and we'll catch you on the flip side. Hey everybody. Thank you so much for listening and watching raising a flipping bar. Just a basic overall disclaimer is that a, This is not legal advice. B, this is not tax advice. C, this is not financial advice. I hope you get the gist, but I'm obviously not a lawyer, not a CPA hell. I'm not even a real estate agent actually, but in general, we hope you get a ton of value out of this, but there is a bit of a disclaimer. Please consult a professional if you have any questions whatsoever.