The Political Pendulum

Generations react to political changes & what it says for real estate.

After all that this year has brought us a little change might be helpful, right!?  Our nation is constantly in a political pendulum swing in both state and federal systems, as is the real estate market.  That market typically swings from sellers to buyers, although with this current market, it seems to be swinging towards sellers almost indefinitely.   This can’t last forever, but it is encouraging one trend: Multi-Family Sales!  According to the Helena Area MLS, from 9/1/19 to 12/9/19 only 18 multifamily properties changed hands in our market.  In the same period this year, 31 properties.  With 10 on the market today.  What is driving this?  I will take a guess and say that the generations are reacting to 2020.  Baby Boomers are cashing out when the market is high, which they should!  They have worked hard to build portfolios and found stability in rentals, but change could be around the corner.  One possible change that some fear is the dissolution of the 1031 exchange, which has helped portfolios expand with tax deferment.  Another change is the eviction moratorium, which could be extended, and brings great instability to an otherwise stable investment. With these changes buyers don’t seem dis-swayed!  In my opinion it is because we are seeing Gen-X & Millennials jumping into the multi-family market in droves, after watching from afar and not seeing an opportunity, they see it now. Let me know your thoughts! josh@bigfootmg.com