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Goldman Sachs is cautioning investors against jumping into real estate in an attempt to make up for missed gains.
Analysts say the sector is facing many challenges at the moment—including the separation of real estate from the financials sector in the S&P 500 next month—and Goldman Sachs analyst David Kostin says it’s too risky for investors to try to buy now.
Still, the firm expects many large-cap mutual funds (which don’t have much exposure to the real estate sector) will try to play catch-up—estimating approximately $19B in new demand, Bloomberg reports.
“Looking forward, we recommend a neutral weighting to the real estate sector given slowing top-line revenue growth, average relative valuation and risks from a higher interest rate environment,” David wrote. [Bloomberg]
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