Real Estate

Picture the U.S. housing market as a bright red, helium-filled balloon bumping around the ceiling for the last couple of years, but currently suffering a slow leak that interrupts its sprightly bounce, suggests Crocker Liu, professor of finance and real estate at the W. P. Carey School of Business. The latest figures from the National Association of Realtors say sales of previously-owned homes dropped 4 percent in June and July, falling to a 30-month low and adding to a record for-sale home inventory of 4 million. However, Liu contends the market is simply reacting to the Mardi Gras good times of the recent past with a much-needed correction.

Almost anyone can buy a home these days, thanks to specialty mortgages that lower the financial threshold for admission into the hot real estate market. But amid the storm of marketing and media play, one topic that isn't getting much notice is the potential economic impact of this type of lending when new homeowners find themselves paying the price for using creative financing. Experts at the W. P. Carey School of Business discuss what lies down the road for these homeowners when the real estate market begins its inevitable adjustment and begins to cool off. For many, it comes down to a gamble on the continuing health of the U.S. economy.