Typically, in the weeks and days prior to a presidential election, real estate sales across America slump while awaiting a victor.
But buyers, sellers and developers in the New York metropolitan area have experienced the opposite this year, seeing what they call a "pre-election bump."
"The previous election, we're talking about 2019, let's say the kind of second and third quarter of 2019, we didn't see a bump in sales at all. As much as I can recall, actually, the market was relatively slow," Naftali Group Chairman and CEO Miki Naftali told Fox News Digital. "The big difference is twofold."
"The strong sales momentum and buyer interest in the [One High Line] project in the lead up to the election wasn’t something we necessarily expected, given sales usually slow down leading up to national elections," The Witkoff Group co-CEO Alex Witkoff also told Fox Digital.
"But [it] suggests a growing sentiment among buyers who realize now is the time to secure prime real estate assets amidst potential regulatory or economic changes post-election," Witkoff added.
Together, the New York City-based real estate juggernauts have seen a combined sales total north of $503 million this year alone just on projects across Manhattan. Most notably for Naftali, The Henry is located on the Upper West Side and 255 East 77th Street on the Upper East Side. The Witkoff Group’s One High Line in West Chelsea saw twice the sales activity in October than it raked in over the summer.
"During COVID and the couple of years after COVID, a lot of developers weren't able to or didn't feel comfortable to buy and design and develop properties. And more important than that, the commercial banks were not really lending," Naftali explained.
"Now we have a product to sell, and because there is not much inventory, there is a demand... People want to buy and they want to buy a good product. And I also think that this specific election, I think there's so many issues around the world that the election is very important, but it's not the only subject that people are talking and paying attention to," he continued.
Enter, mortgage rates – which Naftali expects to cool significantly over the next two years. Many people feel it’s "better to buy now" when competition might be lowest. However, as of Thursday, the 30-year fixed rate rose for a fifth consecutive week up to 6.72% from last week's reading of 6.54%.
"In the last few weeks at One High Line, buyers who previously saw the project and were considering it have now been moving quickly to purchase ahead of the election," Witkoff noted.
"Buyers in the New York market or in the top markets in the U.S. are very educated. They know what they want," Naftali added. "Good product is selling well, and there is not much inventory of a good product."
As of last week, betting markets skewed heavily in former President Donald Trump’s favor, predicting Trump has an approximate 58% chance of winning against Vice President Kamala Harris.
And while more than $2 billion has poured into election betting, the real estate developers were more bearish about whether their industry is expecting a Trump win as well.
"The market’s current upswing seems driven by factors more than electoral outcomes alone, such as increased demand, promising rates and the continued appeal of New York City," Witkoff said. "The real estate landscape in New York prioritizes long-term stability."
"I actually don't think that the demand in inner cities is related to either betting on Trump winning or Harris winning," Naftali argued.
"I think what will make a difference is once we're over the election, there will be a lot of unknowns or a lot of noise in the media or blaming each other," he continued. "Hopefully, the majority of it will kind of fade away and will go into a little bit of a normal cycle. And I think that either candidate will focus hopefully on getting the economy better and making sure that everyone in America will do better."
Buyers and sellers in the Manhattan market will likely stick to the fundamentals, according to the developers: school zones, job opportunities, entertainment and other quality of life factors.
"Both candidates offer distinct approaches to real estate, but regulatory impacts in the luxury sector, particularly at one-of-a-kind developments like One High Line, will remain minimal," Witkoff said. "New York City’s luxury real estate sector is less affected by short-term policy changes."
"New York developers and brokers and buyers are focusing really [on] supply and demand and what the city, as a city, has to offer. And they are more concerned about the safety and the infrastructure in the city and not necessarily about the federal government," Naftali agreed.
Without making any political endorsement, though, Naftali criticized Harris’ first-time homebuyer credit and pointed out that Trump’s background has a better understanding of real estate.
"I don't think it makes a difference in top markets like New York and in Miami. Not that $25,000 is not a lot of money, but in scale of when you buy an apartment… in scale of the $1 million, $1.5 million [price points], $25,000 is not going to make a difference," he said.
"The fact that Trump used to be a developer in New York, and he definitely understands very well the real estate market and the challenges of being a developer," Naftali added, "because a lot of people are thinking, 'Oh, developers are just making money and everything is great, and it's easy money to make.' Developers are taking tremendous amount of risks, and not everything every time goes well, and the market is changing."
"If you really want to create, to really develop and fill the gap of so many apartments that need to be built to fulfill the demand that is growing around the U.S., [government] has to be involved. The private developers, plus obviously [Trump's] family members, are still very active in real estate. I think between those two candidates, he understands. That's just his background."