With the recent shut down our federal infrastructure, all of wonder how we will be effected. As far as the real estate industry, immediately we should see no effects. This article as shown by WPC with reference to the real estate market in North America certainly shares an opinion of minimal impact unless this shutdown shifts to a prolonged situation.
The U.S. real estate industry is bracing for the impact of the first government
shutdown in 17 years, which went into effect Tuesday morning.
short term, there should be minimal disruptions in the federal loan processing
apparatus, government officials say.
The Federal Housing Authority FHA
will continue to endorse single family loans, and underwrite and approve new
loans during the shutdown, contrary to some media reports. But the agency will
be working with a drastically reduced staff and all 80 Department of Housing and
Urban Development field offices will be closed, "with some limited exceptions
for a very narrow range of activities that are permitted during a lapse in
appropriations," according to the agency's contingency plan.
are able to endorse loans, we don't expect the impact on the housing market to
be significant, as long as the shutdown is brief," HUD says in its contingency
plan. "We could also see a decline in home sales during an extended shutdown
period, reversing the trend toward a strengthening market that we've been
But HUD is blunt in its assessment if the shutdown
continues. HUD's staffing will go from 8,709 to 349.
"If the shutdown
lasts and our commitment authority runs out, we do expect that potential
homeowners will be impacted, as well as home sellers and the entire housing
market," HUD says. "We could also see a decline in home sales during an extended
shutdown period, reversing the trend toward a strengthening market that we've
The federal shutdown will impact the housing market
in other ways. Furloughs at the Internal Revenue Service, Social Security
Administration and Veterans Affairs will make it difficult to find information
and documents to close deals.
The V.A. won't be affected as drastically
as other agencies - only about 14,000 of the agency's 332,000 employees are
scheduled for furloughs, due to a different appropriations process for most
But the impact on buyer confidence and sales will be more
difficult to forecast. On a practical level, more than 700,000 government are
going without pay, a significant part of the buying public.
one of these things; we just sit back and wait and see what happens," Claudette
Reuther, president of the New Orleans Metropolitan Association of Realtors, told
The length of the shutdown is the key variable,
industry officials agree. HUD will eventually run out of its authority to
underwrite loans. At the very least, real estate industry professionals
shouldn't expect prompt response from government offices.
"In most cases,
if you call or email the field office or Headquarters staff, you will hear a
voicemail or receive a return email indicating that the Government is closed,"