Shutdown starts to percolate in the housing industry

How the shutdown is effecting real estate

TUCSON, AZ (KOLD News 13) - This time of year is usually pretty good for real estate agents.

“After the holidays are past, we usually see a bit of an increase in sales and traffic,” said Cathy Chavez, a 25 year veteran of the Tucson real estate market. “I haven’t seen that so much this year.”

It’s hard to blame that on the federal government’s partial shutdown which has 800,000 employees working without pay or not working at all.

But there are signs it may be partially to blame at the very least.

“Locally and nationally, there is buyer uncertainty out there,” said Barbara Wilson, the President of the Tucson Association of Realtors. “You don’t know where we’re going with this, how long it is going and what else it may impact.”

Chavez is showing a three bedroom with a den on the Northwest side which sells for $230,000. It has been on the market for 72 days, which she says is a surprise to her.

“We’ve reduced the price on this house hoping to bring in more buyers,” she said. “We’ve had a little bit more traffic but not like we expected.”

The concern is some of the loans which are not getting approved or delayed.

Some loans which generally take 30 days to process are taking 45 days or longer.

“We’re warning buyers it may take a while longer,” said Derrick Polder, owner of the Polder Group and Summitt Funding. “They should build that in.”

He also says furloughed workers who may be seeking a home loan are the ones who will be impacted the most.

"Pay stubs would be a requirement or if we can get direct verification from their employer,” he said. “But if they can’t get that because their employer is shutdown, they they might be at a dead end.”

But the self employed may also be facing a challenge.

“If this goes on for a while and they need to have their 2018 returns in order to qualify,” Wilson said. “they’re not going to be able to obtain a loan until the government reopens again.”

In the meantime, the real estate market, which was battered in the 2008 meltdown can only hope the shutdown is short and far less damaging.

“It’s the time of the year, we just got passed the holidays and now we have this question, this other hiccup,” said Chavez. And that hiccup is because of the shutdown? “Exactly,” she said.

So far, there are no big outward signs the shutdown is having a major impact on the housing industry.

It’s just that, over time, all those little things could add up to one big thing.

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