Property Valuation
In South Carolina, which factor would most likely cause a DECREASE in capitalization rates (and increase in property values)?
ARising interest rates
BIncreased investor demand for real estate as an asset class✓ Correct
CEconomic recession
DIncreased vacancy rates
Explanation
Increased investor demand drives cap rates down (as investors accept lower returns to own real estate), which increases property values. Rising rates and recession typically increase cap rates and decrease values.
Related South Carolina Property Valuation Questions
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