As the U.S. government shutdown goes on with no end in sight, more aspects of the nation's economy are being impacted. One of these is the real estate industry, which is beginning to find itself affected in numerous ways. From families seeking to purchase a home to agents seeking referral leads
or investors who are wondering if now is the best time to purchase a certain property, more and more people are feeling the results of Washington's disagreements. To learn about the specifics, here are some details to keep in mind.
According to the National Association of Realtors, 25 percent of its member agents report having been impacted by the shutdown. In these instances, it was due to a buyer deciding not to purchase a property now due to the ongoing government uncertainty. However, within that 25 percent, nine percent stated they specifically had clients who were federal government employees, and that those clients were unable to purchase properties as planned.
Along with having clients who were unexpectedly having to delay purchases of homes and other properties, agents reported many other problems associated with the shutdown. For example, since agencies such as the IRS and USDA are currently closed, 17 percent of agents report closing delays associated with USDA loans, while nine percent report delays associated with FHA loans. Regarding the IRS, 13 percent of agents have reported delays in having paperwork processed due to not being able to obtain income verification information from the IRS for clients pursuing various purchases.
As for investors, they too are reporting increasing numbers of delays with making purchases. With more and more uncertainty as to how long the shutdown may last, many are also delaying purchases of residential and commercial properties, leading to a ripple effect throughout the nation's real estate market. According to many economists, if the shutdown lingers, it could lead to increasing fiscal uncertainty within the U.S. stock market and housing market, as well as drive consumer confidence in the nation's economy much lower. If this occurs, it is likely a recession could begin much sooner than previously anticipated, sending home purchases far lower as well.
Because of the many factors currently at work, agents and investors will likely need even more referral leads
, since these leads will be coming from potential buyers and sellers who are prepared to act regardless of the current economic situation. However, even in these situations, delays regarding loans, income verification, and other pertinent areas will probably occur, making the process longer and more complicated than usual. But by dealing with buyers and sellers who are prepared to press on no matter the circumstances, agents and investors should be able to weather the economic storm.