Finance
What is a 'cap rate compression' in Idaho's real estate market?
AWhen cap rates increase due to rising interest rates
BWhen cap rates decrease as property values rise faster than income, reflecting increased investor demand and competition✓ Correct
CWhen lenders compress loan terms
DWhen property management fees rise
Explanation
Cap rate compression occurs when investor demand drives property prices up faster than income increases, causing cap rates to decline. A compressed cap rate means investors accept lower returns, reflecting strong confidence in the market.
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