“The direction of a big act will warp history, but probably all acts will do the same thing in their degree, down to a stone stepped over in a path or a breath caught at the sight of a pretty girl or a finger nail nicked in the garden soil.” John Steinbeck, East of Eden
We’ve heard ad nauseum about finger pointing and blaming concerning who was responsible for the government shutdown in October. It probably depends on your own personal politics as to which side of the argument you line up on, but one thing is clear: The effect that the shutdown had on the entire system of our economy is not simple to measure. Sure, all of the experts and pundits can attach a figure to the estimated amount of revenue that was lost, but there are continuing, far-reaching ripples and intricacies.
Drilled down to the reality of rubber-meets-road real estate, the government shutdown impacts were significant. For example, if you were a conventionally “financed” buyer, and were scheduled to close an escrow in early October, you were very likely delayed, as the provision of income tax documentation, a key service provided by the IRS to major lenders, was not available during the shutdown. Delaying these escrows had a noticeably immediate effect as lenders, REALTORs® and their clients all scrambled to find alternatives to their contractual obligations. This type of influence can’t really be measured, but almost all buyers with a financed real estate transaction and their industry professionals were temporarily forced into crunch mode.
Another difficult to measure impact was the hit taken by consumer confidence, and what that does to the psyche of home buying. We do know that sales statewide were down in October. We also know that much of that decline is attributed to the resultant decrease in consumer confidence driven by the government shutdown and related events. After all, if one feels uncertain about the economic future, be it on a large or a personal scale, one is far less likely to venture into the pool of risk surrounding the sale or purchase of one of the biggest assets someone will ever own.
An exception is if you were a cash buyer. If that applies to you, it’s very possible that you felt little if any impact from the October antics. If you were an investor purchasing government-owned property (foreclosures in particular), however, you almost certainly were delayed in the completion of your transaction.
As Steinbeck intimated, in our world there is no action, regardless of size, that doesn’t impact something else. There are few facets more dependent on other driving factors than the world of real property ownership. Big picture or small, we live on a planet driven by consequences.
A Bay Area native, Mark Penn has been a REALTOR® with Coldwell Banker since 2004. He is also active in animal welfare, and is a former educator, facilitator, and air traffic controller. Mark can be reached at mark@MyHomeInSonoma.com.