How to Buy a Vacation Home During an Election Year

Dreaming of a vacation home getaway? For buyers eyeing their next beach retreat or mountain cabin, election years can bring unique considerations to the real estate market. While it may seem like elections impact only primary residences, vacation properties in resort and leisure areas can be influenced by the political cycle as well. Here’s what to know to make the best decisions and plan a smart vacation home purchase during an election year!

1. Expect a “Wait-and-See” Market

In an election year, buyers in luxury or vacation markets often take a cautious approach. Concerns about potential policy shifts, economic changes, or tax adjustments can lead to a temporary slowdown in buying. That means if you’re a serious buyer, you may find less competition or even motivated sellers who don’t want to wait out the market uncertainty. On the other hand, if you’re looking to sell a property, you might need to prepare for longer timelines.

2. Anticipate Potential Policy Changes That Affect Buyers

Election years often bring questions about possible changes to tax policies and deductions, especially around second homes, luxury taxes, or capital gains. Some buyers look to lock in a property before potential policy changes are made, while others wait to see if new policies offer more favorable terms. Staying informed about candidates’ stances on real estate taxes can give you an edge in timing your investment.

3. Consider Short-Term Rental and Investment Impacts

If you’re buying with rental income in mind, consider that election cycles can impact short-term rental policies. For example, certain proposals may aim to limit or tax vacation rentals, which can influence your investment return. Researching local government and candidate positions on short-term rentals can provide insight into potential restrictions or opportunities post-election.

4. Watch Interest Rate Movements Closely

While interest rates aren’t directly controlled by election outcomes, political uncertainty can affect them indirectly. Rates often see fluctuations during election years due to market anticipation of economic changes. For vacation home buyers financing a property, staying on top of rate trends is essential. A shift up or down can impact your budget and long-term cost, especially for a vacation home that may already carry higher maintenance expenses.

5. International Buyers and Political Stability

In some resort markets, international buyers play a significant role. Election-year uncertainty can influence international investment in U.S. properties, especially if foreign buyers worry about policy changes that impact ownership or taxation. If you’re in an area with a high level of international interest, such as Hawaii or Florida, a slower international market could create more opportunity or shift prices.

Tips for Buyers in Election Years

To help you navigate vacation home buying during election cycles, here are a few practical tips:

Stay Updated on Policy Proposals: Follow the election and candidates’ policies that could affect property taxes, rental regulations, or deductions for second homes.
Lock in Rates When Possible: If you’re ready to buy, consider locking in current mortgage rates to avoid any rate hikes tied to election uncertainty.
Plan for Extra Due Diligence: Work with a realtor knowledgeable in your vacation market area to stay informed about market conditions specific to election years.
Look for Motivated Sellers: The “wait-and-see” environment can mean motivated sellers who don’t want to hold onto their property through election cycles, providing negotiation opportunities.

Why an Election Year Might Be the Right Time to Buy

While elections bring some uncertainty, they don’t always spell trouble for buyers. In fact, an election year could present the perfect window for a vacation home purchase! With the right timing and preparation, you can take advantage of slower market activity, less competition, and possibly even motivated sellers looking to make deals before policies shift.

Whether you’re planning to rent out a beach house or simply enjoy a mountain cabin for yourself, election years can provide great opportunities for savvy buyers. The key is to stay informed, keep an eye on policy proposals, and work with a real estate professional who understands the market dynamics in resort areas.

Pin this post for future reference as you plan your dream vacation home! 

Hanna Strick | Hawaii Realtor | RS-85566

808-295-8101 | HawaiiHomesWithHanna.com

Hanna@C21IslandHomes.com

CENTURY 21 Island Homes