SEATTLE — We’re on day 16 of the government shutdown and analysts say it’s already impacting the housing market, with the economic uncertainty spooking buyers.
“There are millions of government employees who are furloughed who are probably not feeling confident about making any large economic decisions,” said Dave Meyer, head of real estate investing at BiggerPockets, a real estate education company.
But people who don’t work for the federal government are feeling uncertain about the economy, too.
Redfin says pending sales dropped 15.2 percent in the Seattle market over the last month. That’s one of the biggest drops nationwide – only San Antonio saw a bigger drop at 15.8 percent.
“During any period of economic uncertainty, whether it’s before a presidential election, a government shutdown, a pending Federal Reserve decision, people just slow down and want to wait and see what happens next,” Meyer said.
It’s all adding to the slowdown of the housing market. That trend was happening even before the shutdown, as buyers faced higher mortgage rates.
For people who are trying to sell a house, Meyer says, prepare for that sale to take more like thirty to sixty days, instead of about a week -- which we were seeing a few years ago. He also recommends not pricing too aggressively.
The good news is for buyers. Meyer points out that Seattle-area inventory is up about 30 percent compared to a year ago.
That plus interest rates are at 6.25 percent, which is nearly the lowest they’ve been in a year. It all means for the first time in years, it’s much more of a buyer’s market and a good time to buy a home.
“My expectation is that we’ll start to see prices tick down just a little bit. But there are no signs of a full-blown crash. So this actually could be a positive thing for a lot of area potential home buyers because prices will get a little bit better,” Meyer said. “Buyers are enjoying this. They’re taking their time, they’re shopping around for the first time in a long time,” he said.
As for what to expect when the government shutdown ends, Meyer says he’d expect to see people gradually entering the housing market again, but there likely won’t be any sort of quick snap back.
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