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Will deal to end shutdown kick-start real estate sales?

Will deal to end shutdown kick-start real estate sales?

President Trump announced the government will reopen for at least 3 weeks, but is that enough time to close stalled transactions?

BYPATRICK KEARNS Staff Writer JAN 25

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After 35 days of the longest government shutdown in U.S. history, which held up certain real estate estate transactions around the country, a temporary reprieve has arrived.

On Friday, Congressional leaders and President Donald Trump announced they had reached a deal on a continuing resolution that will fund the government for three weeks, until February 15. The deal ensures all government employees will receive their paychecks next week, including backpay missed during the more than month-long shutdown.

The government shutdown reportedly threw a wrench into the plans for many prospective homeowners, but with the chaos of the political climate, and only potentially three weeks until the next shutdown, the housing market may not return to normal anytime soon.

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Take Byron Lohman, an agent with Berkshire Hathaway, who services Palm Springs and Coachella Valley and the surrounding areas.

Byron Lohman of Berkshire Hathaway. Credit: Byron Lohman.

The unique administrative status of these areas, some of which cross into Native American reservations, means that a lot of closings were contingent on approval from the Bureau of Indian Affairs, which was not being funded during the shutdown.

Byron told Inman not sure if the three week resumption will be enough time to get that required approval, if a long-term deal isn’t reached by February 15.

“We can get things in the pipeline and try to get stuff done,” Lohman told Inman. “I don’t know how much stuff got backed up is my issue.”

Lohman said the government shutdown and the three-week fix may not mean potential buyers become more comfortable jumping into home ownership.

“I think buyers are scared to death,” Lohman said. “Regardless of what kind of loan they’re getting.”

Sam Dodd, an agent with Stratum Real Estate Group in Cedar City, Utah, everyone is kind of just waiting to see what’s going to happen. Many buyers in his area rely on loans provided by the United States Department of Agriculture for low-income individuals in rural areas.

Sam Dodd ofStratum Real Estate Group. Credit: Sam Dodd

Dodd said three weeks is enough time to get some work done, but it remains to be seen how backlogged the agency got during the shutdown.

“It usually takes a week,” Dodd said of the USDA underwriting process. “When they get backlogged, it just goes up and up and up.”

The end of the shutdown coincided with a day where airports were reporting long delays and with LaGuardia Airport even halting incoming flights due to staffing shortages. Sara Nelson, president of the Association of Flight Attendants-CWA, told New York Magazine that she recorded a video urging her union workers to mobilize in an effort to end the shutdown.

The deal reached does not include funding for a border wall, as demanded by Trump, but does give both sides three weeks to negotiate. If no deal is reached by February 15, the government could once again partially shut down and impact real estate deals across the country.

Email Patrick Kearns

Article image credited to lev radin on Shutterstock.com

 

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