Interest rates and valuation
L.J. Melody Capital Markets director Mark Scott discusses the impact of rising interest rates on SW Florida housing prices in a Naples Daily News editorial. Like many in the the region, Scott is confident that the market will sustain itself with the steady stream of boomers that will continue to stream into SW Florida.
Rising rates may impact values in Southwest Florida. "May" is the 0perative word. Historically, as interest rates rise, prices on commercial (and residential) real estate fall. Real estate cycles generally in the past have followed rises and declines of interest rates. Many factors - strong demographics, rising construction costs and the rise of real estate as a desirable asset class - may help Southwest Florida stave off a rise in capitalization rates (cap rates) and a decline in property values.Rising rates may impact local real estate values [Naples Daily News]