12 West Hawaii Real Estate | January 18, 2019
Planning to buy a home soon? Here’s how the government shutdown could affect you
If you’re on the verge of closing
on a new home or condo — or
just starting the often arduous
journey of becoming a firsttime
home owner — don’t let the
government shutdown get you down.
Real estate industry experts say
that the U.S. federal government
shutdown, which began Dec. 22, has
not yet had any impact on the buying
and selling of homes in South Florida.
“People are surprisingly less
concerned with the government
shutdown than you might expect,
because everyone knows the
government has to fix it,” said Nancy
K. Corey, regional vice president
of Coldwell Banker Residential
Real Estate. “The only thing that
gets impacted when this happens
is consumer confidence. But the
housing market is driven primarily by
needs and wants, and those always
override other things that might make
you hesitate.”
According to the most recent
monthly report by the Miami
Association of Realtors, sales of
single-family homes in the $250,000-
$600,000 price range surged 12.9
percent in November 2018 over
the same period last year. Sales of
existing condos in the $150,000-
$300,000 range also grew 19.5 percent
year over year.
Cash transactions comprised
37 percent of all closed sales in
November — nearly double the
national figure of 21 percent.
December figures are not yet
available. But the forecast remains
sunny, because the shutdown has
impacted only the administrative side
of the real estate industry thus far.
The majority of qualified
buyers relying on Federal Housing
Administration (FHA) or Veteran
Affairs (VA) assistance — which
guarantees loans for people who
cannot afford a 20 percent down
payment or have low credit scores
— will be able to proceed with
their home purchases, although the
closings could take a little longer.
Freddie Mac and Fannie Mae
operations also remain unaffected
by the shutdown, because neither is
funded by the government.
Wesley Ulloa, a broker with the
Coral Gables-based Luxe Properties,
said her brokerage firm hasn’t yet
seen any impact. But that’s because
most of its pending sales were
already in the closing process when
the shutdown took place.
“We’ve actually seen an increase
in the number of contracts being
signed,” she said. “But there could be
problems down the road.”
For example, Ulloa said that if a
lender needs to get a Form 4506 from
the Internal Revenue Service — a
transcript often required by banks
that verifies the borrower’s tax returns
and annual income — the process
could be delayed, since the IRS is only
operating with 12.5 percent of its total
workforce, or about 10,000 employees.
Ulloa said her firm is already
incorporating a longer grace period
in contracts, giving buyers more
than the traditional 30 days to obtain
financing approval, in anticipation of
a prolonged shutdown.
But Craig Garcia, president
of Capital Partners Mortgage, the
mortgage affiliate for The Keyes
Company, said lenders can find ways
around traditional paperwork during
the shutdown
“It’s not totally necessary to have
(a form 4506), to prove income,” he
said. “You can use canceled checks
or bank statements to show what
you paid to the IRS or what kind
of tax return you received. I spoke
with a colleague at one of the big
banks who told me they haven’t even
issued an internal memo saying that
anything is going to change.”