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A D.C.-area real estate broker said the housing market has shown resiliency during the government shutdown. But he’s concerned about the risk of a recession.
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As the government shutdown enters its fourth week, one D.C.-area real estate broker said the housing market has shown resilience — so far. But he’s concerned about how long it can hold up.
Data from the Greater Capital Area Association of Realtors shows that leading into the shutdown in late September, the D.C. area saw a spike in home sale activity.
That bump came after a slowdown earlier this year during the initial Department of Government Efficiency job cuts.
“D.C., for example, in September, had closed sales that were 12.4% higher than the year before, and the median price was up 13.3%,” said Corey Burr, with the Burr Group at TTR Sotheby’s International Realty.
Burr said while activity remains up, he fears that could change if the shutdown continues.
In the weeks since the shutdown began, Burr said some of his clients who are federal workers have decided to stop looking.
“Several who had been in the market to purchase have simply put things on ice, or they’ve decided to rent as opposed to purchase,” he said.
Those clients are pulling out of searches over concerns about job security, he said.
“They just don’t have the long-term confidence that their jobs are going to be steady,” he said.
Another shutdown impact has been on clients looking to use federal loan programs, Burr said.
“Some government loan programs are being postponed because there isn’t enough staff at the federal level to get these loans through,” he said.
Where things could be headed with the housing market
Going into the shutdown, higher-end properties were performing better, though some areas continue to struggle. Montgomery County, for example, saw prices rise.
Across the region, the number of listings on the market and the number of days on the market were at their highest in the last five years.
“And the average sold price to original listing price is the lowest in the last five years,” Burr said.
While he noted that overall activity hasn’t been dramatically impacted yet, he warned that lawmakers not striking a deal could lead to more difficult times, not seen since 2008.
“They’re playing with fire a little bit the longer this goes on,” Burr said. “It could be that our region could go into a recession when the rest of the national economy kind of bumps along.”
He said for some buyers, the uncertainty has been an advantage as prices dip and more homes are made available.
“This is the time to jump if they feel confident about their job and they fall in love with a house that suits their needs,” Burr said.
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Mike Murillo
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