What a Government Shutdown Means for Martha’s Vineyard Real Estate
How a national pause can create local opportunity in the Vineyard housing market
There’s been a lot of talk lately about how a government shutdown impacts the housing market. You might be wondering: Is everything going to stop cold?
The short answer? No.
Homes are still being bought and sold. Contracts are still being signed. Closings are still happening. The difference is that certain parts of the process may slow down a bit — but the market itself continues to function.
Nationally: What Happens During a Shutdown
When the federal government shuts down (or scales back operations), a few real-estate-adjacent processes may be affected:
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Applications for loans backed by the Federal Housing Administration (FHA), Veterans Affairs (VA), or United States Department of Agriculture (USDA) may face delays. These loans account for roughly one-quarter of all mortgage applications.
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Flood insurance approvals can also be impacted through the National Flood Insurance Program, which may delay closings in flood-zone areas.
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Even when delays happen, they tend to be short-term. During the 2018–2019 shutdown (35 days), National Association of Realtors (NAR) data showed existing-home sales dipped briefly and rebounded quickly once the government reopened.
Data from the National Association of Realtors (NAR) shows existing home sales slowed for about two months, and then rebounded quickly as delayed closings worked their way through the system when the government reopened (see graph below):
So What Does That Mean for You?
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If you’re actively buying or selling: Don’t panic. Most transactions will still move forward. You might see a few extra days of processing if your deal involves FHA/VA/USDA loans or coastal flood insurance — but these are typically blips, not deal-killers.
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If you’re just starting to think about buying or selling: This could be a subtle advantage. When some buyers become cautious and pause plans, fewer competitors show up — and well-prepared sellers may find motivated buyers more willing to negotiate.
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If timing matters: Build in a little cushion. Assume a possible extra week or two for closing if agencies are impacted. Move intentionally now rather than waiting for everything to be “perfect,” because markets rarely pause for perfection.
But Let’s Talk About Martha’s Vineyard
Our island market throws in a few unique layers — so how might a government shutdown ripple here on Martha’s Vineyard?
1. The Basics Still Hold
If a shutdown slows underwriting or flood-insurance approvals, that could affect some transactions on the Island. But the market doesn’t freeze up. Buyers keep buying, sellers keep selling, and deals continue to close — sometimes just with a slightly longer runway.
2. Local Market Snapshot
According to data from LINK MLS and analysis from the O’Hanlon Group, the Vineyard market remains active:
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Home sales during the first half of 2025 were up roughly 8% compared to the same period in 2024.
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New listings have increased significantly year-over-year, with total active inventory still below pre-pandemic norms but trending upward.
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Average sale prices have remained relatively stable, hovering around $1.9 million across all towns.
In plain English: buyers have more to choose from than they did a year ago, but well-priced properties are still selling in a reasonable timeframe.
3. Why the Vineyard Might Be a Bit More Insulated
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Many buyers here are purchasing second homes or investment properties — they’re not on tight relocation timelines, so small delays rarely change their plans.
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Sellers on the Island tend to be more deliberate and less reactive to short-term national headlines.
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That said, the high-end luxury segment (typically $4 million +) can still respond quickly to national sentiment or financial-market movement.
4. What a Shutdown Could Specifically Trigger Here
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Flood insurance: For waterfront or low-lying properties, a pause in flood-insurance approvals could delay some closings.
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Government-backed loans: Less common on the Vineyard given price points, but still a factor for certain buyers.
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Pace of deals: Sellers expecting multiple-offer scenarios might see slightly slower momentum, but serious buyers often view these moments as opportunities to negotiate favorable terms.
5. Strategy Suggestions for Island Buyers & Sellers
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Buyers: Get pre-approved early and make sure your lender can navigate potential processing slowdowns. Factor a little extra time into your closing timeline.
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Sellers: Handle pre-listing details early — repairs, septic updates, title work — so you’re ready when buyers step forward.
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Everyone: Work with local experts who know how to navigate Island-specific logistics, from ferry schedules and contractor availability to coastal permitting and insurance nuances.
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Timing: If you’re targeting an early-year closing, build in some flexibility. If you’re planning a spring or summer list date, get started now so you’re ahead of the next market wave.
Your Takeaway
A government shutdown can create short-term delays, but it doesn’t derail the housing market. On Martha’s Vineyard, we’re seeing steady activity, balanced pricing, and an inventory level that finally gives buyers some breathing room.
If you’re wondering how national headlines might affect your local plans, let’s talk. The O’Hanlon Group is your trusted Martha’s Vineyard resource — here to help you move confidently, no matter what’s happening in Washington.
