Hi ,
The following is an excerpt from a recent Forbes.com article that is featured as the top story in our Note and Real Estate News section below.
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Vice President George H. W. Bush was elected president in a landslide in 1988. The U.S. housing market had been booming for years before that election. The Northeast boomed from 1986 to 1988, and California was also booming in 1988.
Eight states voted for George Bush that haven’t voted for another Republican presidential candidate since then. Six of those states were in the Northeast, and one was California. All of those states saw big house price increases in the 1980s.
By 1990, however, house prices nationally had stopped increasing. Real house prices and family home equity wealth fell with the 1990 recession. The number of households losing real home equity wealth was far greater than the number of households losing jobs during the 1990 recession.
Despite his landslide victory just four years earlier, President Bush lost the 1992 presidential election. A Bill Clinton campaign theme was, “It’s the economy, stupid.” It could have been, “It’s the home equity, stupid.”
If house prices had been more stable and only increased more or less as much as the general inflation rate, what might have happened to George Bush in those two elections?
If house price inflation had been more stable and house prices didn’t fall during his presidency, would George Bush have won in 1992? Maybe.
