Commercial real estate has been a big winner for years thanks to low interest rates. Rising interest rates are now in the air and are a threat to real estate values. The speed interest rates will rise is not clear. The real estate boom has been driven in part by investors getting better returns than those found in safe low yielding bonds.
2017 U.S. Housing Forecast predicts that home price growth will slow to 3.9% from 4.9% in 2016. Western cities have the nation’s strongest real estate trends, with Los Angeles second after Phoenix-Scottsdale. Strong economic and population trends will continue to be the driving factors.