Today’s Interest Rates May Be the New Normal

LAGUNA BEACH, CA—During the 20th Annual Winter Forum on Real Estate Opportunity & Private Fund Investing in Laguna Beach, CA, interest rate discussion took center stage on Wednesday morning. Panelists expressed the view that rates are likely to decrease in the upcoming year.

Charlie Woo, President of Fidelity Bancorp Funding, highlighted the complexity of considering various factors beyond just Fed rates and interest rates. He emphasized the importance of understanding the dynamics of what banks are planning.

According to Woo, the interplay between interest rates, supply and demand, and capital in the space is crucial. Regardless of whether inflation is tamed or not, Woo suggested that the historical interest rate average of 4% is no longer the norm. The new normal is expected to align more closely with today’s rates. Woo emphasized the need to reset the mindset and expectations of borrowers.

Michael Knott, a panelist and head of US REIT research at Green Street, agreed that interest rates are a significant point of discussion. However, he expressed the belief that the current situation represents a reasonably expected scenario, and he anticipates it to persist for a considerable duration.