How Government Shutdowns Affect Real Estate (And What Lincoln, CA Homeowners Should Know)

by Jaydee Sheppard October 22, 2025

When most people think about government shutdowns, they picture politics in Washington. They don’t consider that a shutdown can affect what happens at home, quite literally. But here’s the thing: shutdowns can have real ripple effects, especially in real estate. Even if they don’t crash the market, they can definitely slow things down, delay transactions, and make buyers or sellers a little uneasy.

If you live in Lincoln, CA or anywhere in Placer County, this article is here to break it all down and show you what to expect. I’ve been through these cycles before, and I’ll share how you can stay ahead and make smart moves during uncertain times. But maybe more importantly, you will learn that you just need to have a little more patience in time of a government shutdown.


What We Learned from the 2018–2019 Government Shutdown

Let’s rewind to the longest federal shutdown in U.S. history. It lasted 35 days from from December 22, 2018, to January 25, 2019, and occurred during Donald J. Trump’s first presidential term. The shutdown stemmed from a standoff over funding for a proposed U.S. and Mexico border wall. It impacted hundreds of thousands of federal workers and had ripple effects across various sectors, including real estate. Here’s what happened:

  • Home sales dipped. In November 2018, about 5.18 million existing homes sold. That dropped to around 4.97 million by January 2019. But the market rebounded quickly once the shutdown ended.
  • Loan processing slowed. Government-backed loans through the FHA, VA, and USDA were delayed due to limited staffing.
  • Flood insurance stalled. The National Flood Insurance Program couldn’t issue new policies for a bit, which held up closings in some areas.
  • Delays lingered. Even after the shutdown ended, it took weeks for agencies to catch up, pushing out some closing dates.

Bottom line? Shutdowns can create headaches, but they don’t usually cause lasting damage. The real estate market tends to bounce back fast.


How Shutdowns Could Affect Today’s Real Estate Market

Even now, a federal shutdown can temporarily disrupt real estate activity. Here are some of the most common effects:

ImpactWhat HappensWho’s Affected Most
Mortgage delaysFHA, VA, and USDA loans take longer to approveBuyers using government-backed loans
Flood insurance issuesNew policies may be pausedBuyers in flood-prone areas
Permitting slowdownsProjects needing federal permits get held upBuilders and developers
Federal contracts or leasesPayments may be delayedCommercial property owners
Hesitation among buyersUncertainty causes some to pauseAll buyers and sellers

For most people in Lincoln, these are short-term issues. Once the government is back up and running, things usually move quickly to catch up.


What Past Shutdowns Have Taught Us

Over the years, we’ve seen three clear patterns when shutdowns hit:

  1. Delays are common, but crashes are not. Activity slows, but the fundamentals stay strong.
  2. The rebound is real. Once things reopen, delayed closings and buyer activity usually pick up fast.
  3. Some areas are hit harder than others. Places more reliant on government-backed loans feel it more. Thankfully, Lincoln has a diverse buyer pool and a healthy mix of financing options.

That’s why our local market in Lincoln and the rest of Placer County tends to recover quickly.


What You Should Do If Another Shutdown Happens

If you’re thinking about buying or selling and there’s talk of a government shutdown, don’t panic. Here’s how to stay ready:

For Homeowners and Sellers:

  • Be ready for minor delays. Even if your buyer is well-qualified, loan approvals or insurance might take a bit longer.
  • Keep communication open. Work with an agent who keeps you informed every step of the way.
  • Stay confident. The Lincoln market is resilient. Demand remains steady, and prices have held strong.

For Buyers:

  • Give yourself extra time for loan approval or document processing.
  • Choose a lender with experience in government-backed loans.
  • Work with a local agent who understands the local market and how these delays can impact your purchase timeline.
  • Don’t let temporary uncertainty shake your long-term plans. Lincoln remains a great place to buy.

Why Work With a Local Expert in Lincoln, CA?

Here’s why choosing the right agent matters:

  • I understand the ins and outs of Lincoln neighborhoods, price trends, and buyer behavior.
  • I track daily changes in the market, from loan processing delays to federal impacts.
  • I’ll help you navigate issues before they become problems and keep everything moving.
  • Most of all, I’ll make sure you don’t miss out on the right opportunity—even during a slowdown.

Buying or selling a home is already a big decision. Throw in a government shutdown, and it can feel overwhelming. But with the right expert in your corner, you can move forward with confidence.


Final Thoughts

Shutdowns might cause temporary speed bumps, but they don’t change the strength of our market here in Lincoln. If you’re buying, selling, or just thinking about your next move, now’s the time to plan ahead.

Want to talk about your specific situation or have questions about how the market is doing? Let’s connect. I’m here to help guide you through whatever comes next.

How does a Government Shutdown Affect Realtors? Read this article from NAR…

https://www.nar.realtor/advocacy/what-a-government-shutdown-means-for-realtors

If you are thinking about buying or selling, check out my homes page at www.jaydeesheppard.com

Whitehouse with a chain and lock.  How to shutdowns affect real estate
 by Jaydee Sheppard, top Lincoln, Ca realtor

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Jaydee Sheppard
Jaydee Sheppard is a top real estate agent serving Lincoln, Rocklin, Roseville, Granite Bay, Loomis, Penryn, Orangevale, Newcastle, Citrus Heights, Antelope, Sacramento and Fair Oaks, California. With a concierge-style approach and deep local expertise, Jaydee helps families buy and sell homes with confidence — from preparing listings with high-level marketing to negotiating record-breaking sales.

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