The recent federal government shutdown officially ended last week. Even though it was temporary, it created real challenges for buyers, sellers and homeowners here in San Diego. Now that agencies are back at work, many people want clarity on what this means for the housing market moving forward.
This guide explains what happened, how the shutdown slowed real estate activity and what you can expect as the market begins to recover.
How the Shutdown Affected the Real Estate Market
When federal agencies paused or operated with reduced staffing, several key steps in the real estate process slowed. These changes had a direct impact on buyers and sellers throughout California, including San Diego County.
FHA and VA Loan Processing Slowed
Government-backed loans depend on federal staffing and verification systems. During the shutdown, FHA and VA approvals moved slower. This created delays for buyers who rely on these programs.
You can read more about this impact here through Morningstar, which explains how buyers were left waiting during the shutdown:
https://www.morningstar.com/news/marketwatch/2025110385/home-buyers-are-being-left-in-limbo-as-the-shutdown-brings-these-parts-of-the-housing-market-to-a-halt
Flood Insurance Processing Was Interrupted
Some areas in San Diego County require flood insurance for a sale to close. The National Flood Insurance Program experienced interruptions, which delayed transactions that required policy approvals or renewals.
Proof dot com provided a clear explanation of how flood insurance delays affected closings:
https://www.proof.com/blog/government-shutdown-real-estate
Buyer Confidence Declined
Uncertainty reduces activity. Even buyers who were ready to move forward became cautious.
Realtor.com reported that the shutdown created tension and slowed momentum across many markets:
https://www.realtor.com/news/real-estate-news/shutdown-over-housing-effects-weekly-housing-market-update-november-14-2025
Closings Were Pushed Back
Slow processing, limited verification and delayed insurance steps kept some closings from happening on schedule. Transactions that were near the finish line were forced to wait until agencies reopened.
What to Expect Now That the Shutdown Has Ended
The shutdown ended last week and federal programs are coming back online. Here is what San Diego homeowners and buyers can expect in the near term.
Federal Housing Programs Are Restarting
Services that paused during the shutdown are now resuming. The National Association of Realtors confirmed that federal housing programs are returning to normal operations:
https://www.nar.realtor/magazine/real-estate-news/federal-housing-programs-to-resume-following-government-spending-deal
Agencies are now working through the backlog that built up during the shutdown.
Delayed Transactions Are Moving Forward
Buyers who were stuck in limbo are beginning to receive updates. Sellers who were waiting on federal approvals may finally see movement in their closing timelines.
Buyer Confidence May Improve
As the shutdown fades into the past and systems return to normal, buyers who paused their search may begin looking again. This can create renewed demand in markets like San Diego where inventory is already competitive.
The Market Needs Time to Normalize Fully
Although programs have resumed, it will take a little time for agencies to catch up. Approvals and verifications may still move slower in the short term.
What This Means for Homeowners in San Diego
San Diego is one of the most resilient and desirable real estate markets in the country. Even temporary disruptions can create opportunities for homeowners who are considering selling.
This applies especially to homeowners experiencing financial challenges or facing the possibility of pre foreclosure. When the market restarts and buyer confidence rises, sellers can often take advantage of renewed activity.
If you were planning to sell but waited because of the shutdown, now is a smart time to revisit your options.
Property Fling specializes in helping San Diego homeowners who need a fast and simple solution. Whether you are dealing with hardship, delayed paperwork or a timeline that was disrupted by the shutdown, our team can help you move forward with clarity and confidence.
Final Thoughts
The recent shutdown caused delays across the real estate world, including here in San Diego. Now that federal programs are active again, the market is beginning to regain momentum. While it will take a little time for everything to return to normal, the direction is positive.
If your plans were put on pause or if you want to understand how this reset affects your home selling strategy, Property Fling is ready to help.
Contact Property Fling today to review your options and take your next step with confidence.
