Is the government shutdown affecting the Leavenworth real estate market?
One of the questions we are starting to get asked regularly is how is the government shutdown affecting the Leavenworth real estate market.
Photo courtesy of Stephen D. Melkisethian on Flickr
There are three parts of the answer to this question: 1. Consumer confidence 2. Government programs and services 3. After the shutdown
1. The effects of the shutdown on consumer confidence will depend quite a bit on the length of the shutdown. Of course, if the government defaults on its debts and doesn’t raise the debt ceiling then we will likely see an even greater collapse of consumer confidence. There is a huge correlation between consumer confidence and the number of homes that sell in Leavenworth. When confidence is low, buyers aren’t buying vacation homes in Leavenworth.
2. From USDA and FHA Loans, to IRS transcripts, there are a number of government programs related to real estate that are not available right now. Some of our favorite blogs and news sources have done a great job of lining out the details:
3. But what about when the government is back at work, won’t everything be fine then? My friend Rhonda Porter, a Seattle area mortgage expert writes:
Lenders obtain tax transcripts on transactions to make sure the income provided on the application and other supporting documentation matches what is filed with the IRS. ………..Under normal (non-shutdown) circumstances, lenders will not close without the transcript………. Once the shutdown is over, the IRS will experience an enormous backlog of requests for tax transcripts. And if lenders require tax transcripts in files before funding once the shutdown is over, it may cause severe delays. The longer the shutdown continues, the more the backlog will build.
We’re crossing our fingers that the government opens its doors soon and that the consequences to the housing market in Leavenworth and elsewhere are small.