The Financial Crisis

Like it or not, as home sellers, we are all entangled in the current US financial crisis. Indeed, housing is the root of all the problems we are seeing.

How is this crisis affecting you?

A main issue I see is the related credit crisis. As lenders cannot gage the bottom of the market, or more precisely, can’t put a value on prospective loans, the credit market has dried up. This is the case for both commercial and residential lending. If we to see a bottom, any bottom, lenders would be able to put valuations on homes and evaluate borrower’s ability to repay.

So even if we have a prospective sale, or two parties interested in a swap, if there is a mortgage involved that could be a deal killer.This also gives us, as house swappers the opportunity to look for deals that don’t require mortgages. This may be only a small portion of homes for swap, but at least they have an option available that doesn’t include the need for a mortgage.

What is your opinion on the crisis?

It seems to me that there is truth in something I heard recently about the US economic system: We are capitalists when there is profit, but socialists when there are loses. Seems like that is the worst of all options.