Govt Shutdown & Real Estate?

[TashaC.]

I'm a little behind the times as I didn't think a serious shutdown would REALLY happen. I knew it has happened in the past and it seemed to be a "blink and its over" type of thing. Plus I was much younger the last time it happened and my priorities were different.

I'm not sure how long people are predicting this to last. A week? It cant go on longer then that without systems really failing...right?

Do you guys think this govt shutdown impacts real estate transactions? Price swings? Will people be as likely to get a mortgage with a govt shutdown? Just curios on your take.

[tulog]

What 'system' are you referring to? I cannot think of a federal government entity that impacts daily real estate transactions. Government-backed mortgage insurance and repurchases are only important in an abstract sense to the willingness of private banks to issue loans.

Personal opinion, the longer the shutdown, the more people will realize nothing much bad happens when the government does nothing.

[ua_guy]

What 'system' are you referring to? I cannot think of a federal government entity that impacts daily real estate transactions. Government-backed mortgage insurance and repurchases are only important in an abstract sense to the willingness of private banks to issue loans.

Personal opinion, the longer the shutdown, the more people will realize nothing much bad happens when the government does nothing.

You are slightly wrong here. The direct impact is that federal loan programs (like the VA) don't approve loans when there are no staff to approve them. Buyers are being removed from the market who are using those programs. They wait, the sellers wait, and home sales slow down.

The indirect impacts to real estate are numerous, though. A shutdown will theoretically trigger an overall economic cooling. Investor confidence goes down, job growth slows, home sales slow down, credit markets generally tighten, and housing prices fall.

The overall market response to the start of the shutdown is hard to gauge. The market slid for 8 days until today when it carried along just fine. As mentioned in another thread, the debt ceiling is the next big hurdle, and failed negotiations there could really drop the bottom out of the market.

[Staceyy]

Here is your answer..http://www.cnbc.com/id/101074186

[TashaC.]

thanks for the perspectives. I agree that so many people being furloughed would make them cautious about home buying, so there will be less buyers in the pool....but will the shutdown last long enough to really cool real estate prices, or will it just cause a few days delay for people in the process?

[Jerry91]

A government shutdown may not have immediate impact on the real estate market. However, if the shutdown continues for 2-3 weeks, then the impact may be prominent. As far as mortgages are concerned, the USDA will stop issuing loans. As far as HUD is concerned, it may remain operational but the staff will be reduced drastically.

[tulog]

Epiphenomenons.

[ua_guy]

Epiphenomenons.

Would you like to explain your position, which is clearly wrong?

[tulog]

Would you like to explain your position, which is clearly wrong?

If "clearly wrong", why do you need an explanation?

Are you just being an ass? Or are you too lazy to research for yourself? Either way, you are a waste of time.

[ua_guy]

If "clearly wrong", why do you need an explanation?

Are you just being an ass? Or are you too lazy to research for yourself? Either way, you are a waste of time.

Because I think overwhelmingly and obviously, much like the earth IS round, the shutdown (and upcoming debt ceiling negotiations) will impact the real estate market and transactions.

So, I'm asking you why you think the world is flat. Maybe there's something me or the other people posted who agree that the impacts are rather clear and obvious, haven't considered.

"Epiphenomenons" infers impacts that are unrelated to the shutdown, or are ancillary, almost by chance. These impacts are directly related to the shutdown. It's not my fault you decided to post in a room full of people with critical thinking skills.

[tulog]

will impact the real estate market and transactions.

Where is the evidence?

Even if there were correlation, how do you distinguish an impact from the shutdown from random changes in price? You believe economics is a science, and that sensational news reports are evidence. Economics is not science, and price changes are more random than you believe.

impacts are rather clear and obvious, haven't considered.

Impacts cannot be clear and obvious where you haven't proven impacts (besides citing your opinion or news reports), or distinguished price effects from random changes. You made a hypothesis which is unproven. Economic guesses are not an excuse for evidence.

These impacts are directly related to the shutdown.

Evidence of impact? As distinguished from random changes?

[ua_guy]

Where is the evidence?

Even if there were correlation, how do you distinguish an impact from the shutdown from random changes in price? You believe economics is a science, and that sensational news reports are evidence. Economics is not science, and price changes are more random than you believe.




Impacts cannot be clear and obvious where you haven't proven impacts (besides citing your opinion or news reports), or distinguished price effects from random changes. You made a hypothesis which is unproven. Economic guesses are not an excuse for evidence.




Evidence of impact? As distinguished from random changes?

Loan approvals in collaboration with the HUD have been slowed and have ceased in some cases. That is a direct impact to the real-estate market. Lenders and borrowers have been removed from the equation.

You're thinking too hard about this one.

[trilansing]

Effect of Government Shutdown on Housing Market

The main effect that the government shutdown can have on the housing market relates to the IRS being shutdown and mortgage applicants not being able to got the information necessary to legally become approved. Thus, in the short term, a government shutdown doesn't have much effect, but in the long term there can be some pretty big implications.