Friday, January 30, 2015
PLACERVILLE, CALIFORNIA
99 CENTS

Rising rates, health care lead issues affecting real estate

By
December 24, 2013 |

Subscription Required

Thank you for reading the MtDemocrat.com digital edition. In order to continue reading this story please choose one of the following options.

Current Subscribers
If you are a current subscriber and wish to obtain access to MtDemocrat.com, please select the Subscriber Verification option below. If you already have a login, please select "Login" at the lower right corner of this box.

Subscriber Verification

Special Introductory Offer
For a short time we will be offering a discount to those who call us in order to obtain access to MtDemocrat.com and start your print subscription. Our customer support team will be standing by Monday through Friday, 8am to 5pm to assist you.

Call and Save! (530) 344-5000

If you are not a current subscriber and wish not to take advantage of our special introductory offer, please select the $12 monthly option below to obtain access to MtDemocrat.com and start your online subscription

Help?

Scott Muldavin, industry veteran and president of The Muldavin Company Inc., a consulting firm in San Rafael that serves the real estate industry, shared his insights into top issues that could potentially impact homeowners, real estate markets and the industry in the coming years.

He said the top issue affecting real estate is that historically low interest rates have driven the economy and real estate markets in recent years, but 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 about investing in real estate.

“Interest rates are going to rise significantly, so my advice is to be careful about your investments today and lock in those low rates if you can,” said Muldavin.

He said it is also an important issue that has implications for real estate. As the population ages, there will be greater demand for senior housing, requiring a change in the configuration and size of available housing, and for greater medical care, resulting in an expansion in medical facilities.

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 is back. For residential markets, underwriting remains tougher but rates are near historic lows and affordability remains high.

Future housing demand from echo boomers, the 80 million Americans born between 1982 and 1995, will also impact real estate markets. “We are the only developed country that has had an echo boom and that’s a positive thing if the country can react and respond to it,” said Muldavin.

Echo boomers often prefer a more flexible and active urban lifestyle, they rely heavily on mass transit, and are often willing to trade home size for location. However, Muldavin said that the suburbs are fighting back with better mass transit, new bike paths and repurposed properties to attract more future buyers.

Climate change and more extreme weather patterns will also continue to have a strong impact on coastal homes and many other properties across the country. 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 paying significantly higher insurance premiums.

Like weather and geologic events, major global events can also impact real estate markets, such as acts of terrorism, war, global debt crisis and financial and economic downturns. “The risk of future events is high, and while it’s always hard to anticipate these risks, they need to be considered because their impact is often great,” said Muldavin.

Increased natural gas and oil production in the U.S., which has an impact on the economy and environment, is another issue with implications for real estate. He said there’s been an increase in fracking and oil and natural gas production in recent years, and while this is creating greater employment opportunities and reducing U.S. dependence on foreign oil, it’s also contributing to climate change, environmental degradation and contamination.

Muldavin also cited globalization, foreign investment and the economies of other countries as variables that will continue to have a greater impact on the U.S. economy and real estate market.

Another issue is how technology will continue to impact office spaces. Muldavin said many corporations are employing work-from-home policies and other mobility solutions that are allowing individuals to work when and where they want, significantly reducing office space requirements.

“Many people are replacing physical items with electronics and free or virtual products, such as e-books and smartphones enabled with cameras, GPS and flashlights. This means businesses will continue to require less retail space, so I believe the trend in the future will be for fewer and smaller stores,” he said.

Muldavin said the impact of the Internet on bricks-and-mortar retail stores is also a growing issue. He said retail demand is down across the country due to an increase in Internet sales, which are expected to rise from the current 6.5 percent to nearly 15 percent by 2020.

Comments

comments

  • Recent Posts

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    News

    Limited Prop. 90 extension approved

    By Chris Daley | From Page: A1

     
    Placerville PD testing out body cams

    By Wendy Schultz | From Page: A1

    Clay Street bridge plan reactivated

    By Wendy Schultz | From Page: A1 | Gallery

     
    American River Inn: Duo maintain Georgetown landmark

    By Rebecca Murphy | From Page: A1 | Gallery

     
    Mustang strikes tree on Latrobe Road

    By Cole Mayer | From Page: A3

    Multi-car collision causes major injury

    By Cole Mayer | From Page: A3

     
    Awards for innovative EID workers

    By Michael Raffety | From Page: A3

    DUI patrols set for Super Bowl Sunday

    By El Dorado County District Attorney's Office | From Page: A10

     
    .

    Opinion

    Salmon on Cosumnes?

    By Mountain Democrat | From Page: A6

     
    The weekly Daley: I’m not a scientist, but…

    By Chris Daley | From Page: A6

    Billingsley’s Bullets: Want to create ageless joy?

    By Bob Billingsley | From Page: A6

     
    .

    Letters

    When is a fee not a fee?

    By Letters to the Editor | From Page: A5

     
    I hope his friends read Altshuler’s column

    By Letters to the Editor | From Page: A7

    Placerville Main Street Rehabilitation Project

    By Letters to the Editor | From Page: A7

     
    .

    Sports

    South 1 season gets underway

    By Jerry Heinzer | From Page: A11

     
    El Dorado sets up Sr. Night showdown

    By Jerry Heinzer | From Page: A11 | Gallery

    Cougars edge Union Mine

    By Jerry Heinzer | From Page: A11 | Gallery

     
    El Dorado races past D’backs

    By Mike Bush | From Page: A11 | Gallery

    Roundup: Jan. 28, 2015

    By Democrat Staff | From Page: A11

     
    Alpine Race results

    By Democrat Staff | From Page: A11

    Bruins pin down Roseville

    By Mike Bush | From Page: A12 | Gallery

     
    .

    Prospecting

    IT takes two in ‘Red, White and Tuna’

    By Pat Lakey | From Page: B1 | Gallery

     
    Things to do: Jan. 30, 2015

    By Democrat Calendar | From Page: B2

    Discover Ecstatic Dance in Placerville

    By News Release | From Page: B2

     
    Guitar heroes play at Harris Center

    By Carrera Productions | From Page: B2

    Pink Floyd tribute at Sutter Creek Theatre

    By Sutter Creek | From Page: B3

     
    Guess Who is at MontBleu

    By Montbleu | From Page: B3

    Feist Wines presents Willie Watson in concert

    By Feist Wines | From Page: B7

     
    Visual artistry dazzles the audience

    By Harris Center for the Arts | From Page: B8

    Super time at Carson Valley Inn

    By Carson Valley Inn | From Page: B8

     
    .

    Essentials

    Lake levels 1-29-15

    By Michael Raffety | From Page: A2

     
    .

    Obituaries

    Donald Benjamin Deal

    By Contributor | From Page: A2

     
    Janet Louise (Percy) Ostlund

    By Contributor | From Page: A2

    William Charles “Chuck” Terry funeral notice

    By Contributor | From Page: A2

     
    Jerald Warren Bennett

    By Contributor | From Page: A2

    .

    Real Estate

    The curse of a quick offer

    By Ken Calhoon | From Page: HS4

     
    .

    Comics

    Sudoku

    By Contributor | From Page: A13

     
    TV Listings

    By Contributor | From Page: A13

    Rubes

    By Contributor | From Page: A13

     
    Long Story Short

    By Contributor | From Page: A13

    Speed Bump

    By Contributor | From Page: A13

     
    Tundra

    By Contributor | From Page: A13

    Shoe

    By Contributor | From Page: A13

     
    New York Times Crossword

    By Contributor | From Page: A14

    Horoscope, Sunday, February 1, 2015

    By Contributor | From Page: A14

     
    Horoscope, Saturday, January 31, 2015

    By Contributor | From Page: A14

    Horoscope, Friday, January 30, 2015

    By Contributor | From Page: A14

     
    .

    Home Source

    The curse of a quick offer

    By Ken Calhoon | From Page: HS4