Written by David Castellon
Federal workers from court staff to those maintaining national parks are back to work â€” at least for now â€” thanks to an agreement to keep federal agencies funded through Friday.
The prospect of another shutdown concerns those involved in the Valleyâ€™s real estate industry.
â€œTheyâ€™re concerned, but we havenâ€™t seen an immediate impact yet,â€ Don Scordino, president elect of the Fresno Association of Realtors, said of the shutdownâ€™s effects on home buying and selling.
But if the federal shutdown reactivates, and it lasts at least another two to three months, it could start to hurt home sales, he said.
Fortunately, the Valley doesnâ€™t have a particularly high number of federal workers, so the economic effects of the shutdown have not been as severe as they have been areas with far more federal workers, Washington, D.C. and Sacramento among them, said Brian Gilbert, president of the Tulare County Association of Realtors.
As such, at least over the 35 days the shutdown lasted, the numbers of people looking to buy or sell homes seem unaffected, said Gilbert, adding that such activity for January appears to be up.
The same holds true in Kings County, where the Valleyâ€™s highest concentration of federal employees work at Lemoore Naval Air Station.
â€œItâ€™s had no effect,â€ said Glenda Allison, president elect of the Kings County Board of Realtors, noting that the Department of Defense already had its appropriations approved by federal lawmakers for this fiscal year, so base personnel didnâ€™t have to be furloughed due to the shutdown.
â€œI think I heard one agent talking about not being able to get a [U.S. Department of Agriculture] loan, but that was along the coast, and it wasnâ€™t in our area.â€
USDA loans donâ€™t occur often here, as they can be awarded to buy homes only in rural areas, so those delayed due to the shutdown didnâ€™t much affect the housing markets in Tulare, Fresno, Kings and Madera counties, said the real estate experts contacted.
â€œTheyâ€™re only 1 percent of our volumeâ€ of commercially and federal backed home loans, said Rilian Ball a mortgage broker and president of Visalia-based First Capital Group.
As for Federal Housing Administration loans, those were being processed by mortgage brokers during the shutdown, and Ball said the Federal National Mortgage Association â€” â€œFanny Maeâ€ â€” had issued guidelines to brokers during the shutdown to provide home loans to qualified federal workers, even if they were furloughed.
But the local housing market could change if another, more drawn-out furlough occurs, said Ball, who added that he didnâ€™t see such an event having much effect on home sales unless it lasts at least six months.
â€œItâ€™s hard to pinpoint it to the shutdown, but any time there is uncertainty, it affects real estate,â€ he added, â€œIf people feel unstable, they donâ€™t make big purchases.â€
A continued shutdown could present other problems, from government workers hurting their credit ratings because they put off paying some bills to their needing time to get their finances back in order, â€œand itâ€™s going to take them a couple of seasons to recover from that,â€ said Alex Salazar, president of the Madera County Association of Realtors.
In addition, he said, â€œIf the tax returns slow down just a little bit, thatâ€™s a factor,â€ as many buyers use their tax refunds as parts of their down payments.
As for those employees shaken by the shutdown and considering delays in making home purchases, Gilbert said they would have to balance such decisions against the likelihood that both home prices and mortgage rates will increase this year.
â€œThe educated buyers know it will cost them more if they wait.â€