Wednesday, October 22, 2014

Rising rates, health care lead issues affecting real estate

December 24, 2013 |

Subscription Required

Thank you for reading the 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, 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 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 and start your online subscription


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.





Child hit by car in EDH

By Cole Mayer | From Page: A1

New Animal Shelter now open

By Health and Human Services Agency | From Page: A1 | Gallery

Tunnel repair to take 5 months

By Michael Raffety | From Page: A1

Winkler trial: Prosecution, defense rest cases

By Cole Mayer | From Page: A1

EDUHSD: 5 vie for 3 seats

By Wendy Schultz | From Page: A1

8 vie for Cameron Park CSD

By Dawn Hodson | From Page: B1

New general manager hired by GDPUD

By Dawn Hodson | From Page: A1

Former GDPUD GM gets $67k in settlement

By Dawn Hodson | From Page: A1

Cal Fire union endorses three for CPCSD board

By Dawn Hodson | From Page: A3

Northside School Class I bike path opened in Cool

By Rebecca Murphy | From Page: A3 | Gallery

EID backs state water bond

By Michael Raffety | From Page: A3



No to Prop. 46

By Mountain Democrat | From Page: A4



Yes on O

By Letters to the Editor | From Page: A5

Band of not so merry men

By Letters to the Editor | From Page: A5


By Letters to the Editor | From Page: A5

From Idaho

By Letters to the Editor | From Page: A5

Keep McClintock in the Congress

By Letters to the Editor | From Page: A5, 2 Comments

Measure K impacts us too

By Letters to the Editor | From Page: A5



Outside with Charlie: East side

By Charlie Ferris | From Page: A6

Cougars ace Rosemont

By Jerry Heinzer | From Page: A6 | Gallery

Penalty kick keys Bruins’ victory

By Mike Bush | From Page: A6 | Gallery

Trojan girl’s teams first at Sturgeon

By Democrat Staff | From Page: A6

Local squads race at Bronco Invite

By Democrat Staff | From Page: A6 | Gallery

Roundup: Oct. 21, 2014

By Democrat Staff | From Page: A7



At a glance: Here comes the Sun

By Mimi Escabar | From Page: B2

Saw mill kid’s humble beginnings

By Mike Roberts | From Page: B2

Pumpkin Path open at Cedar Springs Waldorf School

By Cedar Springs | From Page: B2

Grow For It: Saving seeds

By Linda Sanford | From Page: B3

‘Rebellion’ does not disappoint readers

By Wendy Schultz | From Page: B3

Food Day looks at all things food

By California State Unversity, Sacramento | From Page: B4

Conference features dynamic speakers

By News Release | From Page: B4



Weather stats 10-21-14

By Michael Raffety | From Page: A2

Building permits 10/13-17/2014

By Michael Raffety | From Page: A2

Crime Log: Oct. 12-14

By Cole Mayer | From Page: A2



Grace Mary Wieland Trumbly

By Contributor | From Page: A2

Wilma Pearlene Jacaban

By Contributor | From Page: A2


Real Estate




By Contributor | From Page: A8


By Contributor | From Page: A8


By Contributor | From Page: A8

New York Times Crossword

By Contributor | From Page: A8

Long Story Short

By Contributor | From Page: A8

Flying McCoys

By Contributor | From Page: A8

Speed Bump

By Contributor | From Page: A8


By Contributor | From Page: A8

Horoscope, Thursday, October 23, 2014

By Contributor | From Page: A8

Horoscope, Wednesday, October 22, 2014

By Contributor | From Page: A8

TV Listings

By Contributor | From Page: A8