Real estate funds appear poised to continue on the strong path they have charted so far this year, returning 20.5% year to date versus the S&P 500s 15.1% rise, Reuters reports.
Shopping mall and hotel stocks have done particularly well since the war in Iraq ended. Going forward, with the economic recovery is in its seventh month, analysts expect new jobs to be created, which, in turn, would give a boost to the demand for office space.
And even though an expected rise in interest rates will likely put downward pressure on the home-buying and refinancing frenzy of the past three years, analysts believe that rental apartments will do well instead.
On the other hand, pessimists warn that there is a glut of apartment and office space. They also note that real estate equities are trading at a 15% premium to their historic averages. Then there is always the possibility of sharp and rapid increases in interest rates. But Donald Cassidy, a senior analyst with Lipper, said he does not think interest rates will rise significantly.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.