The investment outlook for real estate in Florida declined in the second quarter of 2013, the first fall in two years, according to a University of Florida survey.
Optimism has waned as interest rates rise, the report said, based on a survey of 145 real estate analysts, investors, brokers and others.
Interest rates on loans for all property types are based on the 10-year Treasury interest rates, which jumped 66 basis points in the quarter. As of last week, it was up 130 basis points, said Timothy Becker, director of the Bergstrom Center for Real Estate Studies at the Warrington College of Business Administration.
“In the end it makes deals harder to do,” Timothy Becker, director of the Bergstrom Center for Real Estate Studies at the Warrington College of Business Administration, said in the report. “As you increase the interest rate, you have to get more rental growth and higher occupancy in order to make the numbers work.”
The report covers apartments and commercial rental property, single-family houses, condo development and developable land. New single-family and condo development declined slightly, as did the Class A office space.
Nevertheless, land investments in the second quarter reached survey highs. — Emily Schmall