According to an industry expert at the “Top 10 Issues Affecting Real Estate” session at the 2013 National Association of Realtors® (NAR) Conference and Expo, rising interest rates and rising capitalization rates top the list.
According to Scott Muldavin, president of The Muldavin Company Inc., a consulting firm in California, low interest rates have driven the real estate markets in recent years. As rates start to rise, it could raise capitalization rates – the ratio between the income produced by an asset and its cost – which could create anxiety among real estate investors. We are not seeing this problem in Naples yet; the market is strong and investors are looking to buy.
Muldavin said there’s been a capital market resurgence, which is good news for residential and commercial real estate. In commercial markets, transaction volume is up, credit is available, underwriting has loosened and a full range of debt options has returned. Here in Naples we see commercial space once again being leased with new tenants and we even see new construction.
For residential markets, underwriting remains tougher, but rates are near historic lows currently and affordability remains high. This is driving up demand in Naples and we are seeing prices rise.
Other top concerns, especially in Florida, include an aging population who will have special housing needs. As the U.S. population ages, demand for senior housing will go up. This will change the configuration and size of available housing, and it will increase the need for medical care, which will create a demand for expansion among medical facilities.
Climate change and more extreme weather patterns will also have an impact on coastal homes. Muldavin cited the impact of recent storms like Hurricanes Katrina and Sandy, and how property owners in these markets are now dealing with changes in code and zoning standards, and they’re paying significantly higher insurance premiums. Florida home buyers need to be aware of flood zones and changes that could affect flood insurance rates in the future.
We also need to watch out for global events, environmental issues such as drilling, and new technology that cuts down on our need for offices. All these issues and more effect real estate. As a Realtor, I try to stay ahead of the trends to help you make smart decisions when buying and selling property.
If you are thinking about buying or selling property this is my expertise! Please call me, Frank Petras, at (239) 595-2221 or visit www.FrankPetras.com.
As a REALTOR in Naples, Florida with a very impressive international client list, I am known for my incomparable market knowledge, exceptional customer service, superior negotiating skills, high-end global targeted marketing and tremendous results. I have an unrivaled reputation as a luxury property specialist. I have earned local and national recognition for marketing and selling multimillion dollar luxury waterfront and golf course estates and other fine properties in Naples, Bonita Springs, Estero and the surrounding areas.
© 2013 Florida Realtors®
Voted Best Real Estate Agent in Client Satisfaction in Southwest Florida - Gulfshore Life Magazine
John R. Woods’ Emerald and Platinum Circles of Excellence
Realty Alliance Leading Residential Real Estate Sales Professional in North America
Appointed to Who’s Who in Luxury Real Estate
Awarded Million Dollar Guild Recognition by The Institute for Luxury Home Marketing