With the government shut down well under way, many are wondering how this action will effect America’s various industries. With the active housing market being a major contributor to economic recovery, many sellers and agents are asking: will The Shut Down shut us down? Here’s what the National Association of Realtors chief economist Dr. Lawrence Yun told the Huffington Post about the matter:
- How (if at all) will the government shut down effect the housing market? Not much impact in terms mortgage loan availability. Most mortgages will be processed as before because Fannie and Freddie will remain open. FHA loans are to be processed as well. The only negative is from a prolonged shutdown, which impacts consumer confidence negatively.
- What do you say to the Congress about the Debt Ceiling? Avoid another ‘shutdown’ or default. Compromise and raise the debt limit. A default will result in higher interest rates over time. Housing is clearly an interest rate sensitive sector.
- What is needed to spark GDP growth, continue real estate recovery, and put America back on track? The economy is uneven and plodding along. No recession but no robust expansion either. The housing recovery has been one bright sector contributing to economic growth. We need to assure [there are] no obstacles to the housing recovery. Moreover, more home construction can provide an additional boost to the economy, as well as relieving the housing inventory shortage. For that to happen we need more construction loans. Banks are sitting on a pile of cash, yet construction loans remain very difficult to obtain, perhaps because of the excessive regulatory burden on small local banks.
Like much of the country, the Montecito and Santa Barbara markets have been booming most of the summer, with a slight lull experienced as we transition into fall. Riskin Associates will be keeping a close eye on the market and will continue to report on affects seen by this recent economic development.