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|July 21, 2008|
Mortgage restructuring, foreclosures; Fannie Mae, Freddie Mac programs, eligibility; bankruptcy
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News tip: Housing market represents crisis, opportunity, professor says
WEST LAFAYETTE - A Purdue University economist says the U.S. housing market is bucking conventional wisdom this year.
In most years, says Charlene Sullivan of the Krannert School of Management, home sales are either characterized as a buyer’s market or a seller’s market, depending on interest rates, housing starts and the state of the economy.
This year, it is both, depending on where consumers live and where they are moving, she says.
“Supply and demand are out of balance right now,” says Sullivan, an associate professor of management.
“In some parts of the country, home values are going to continue to decline. In other parts of the country, home values are going up.”
Two of the areas where values remain strong and rising are resort destinations. In many parts of the country however, home values have depreciated and still have not reached bottom.
“In the next year or so, you probably will be able to get houses for quite a bit less than you would a couple of years ago,” Sullivan says.
The housing market in many parts of the country reflects the glut of homes caught in the mortgage foreclosure crisis, and that means there is an abundance of homes with discounted prices. While homeowners may not be able to sell their home for the price they want, they may find the price of moving into a larger home or one in a better neighborhood is not as steep as they thought either, Sullivan says.
More about Charlene Sullivan
Professor Charlene Sullivan has served on the Federal Reserve Bank of Chicago Board and authored credit quality, tax reform, deregulation, credit card and consumer credit market publications. She also serves on the boards of the Academy of Financial Services, the Midwest Finance Association and Oak Ridge Mutual Funds. She has taught in numerous programs offered through the Krannert Executive Education Programs and the Center for Agri-Business. She has twice been a recipient of Purdue’s Outstanding Undergraduate Teacher Award.Sullivan has been quoted in The Wall Street Journal, Money magazine, the Journal of Money, Credit & Banking, and the Journal of Consumer Affairs.
Writer: Tanya Brown, (765)494-2079, home: (765) 268-225; tanyabrown@purdueedu