Real estate mutual funds and exchange-traded funds have taken it on the chin recently amid concern about higher interest rates, but investors shouldn't lose hope, experts tell The Wall Street Journal.

Since late May, when the Federal Reserve started making noise about tapering its quantitative easing, the funds have lost about 12 percent on average, according to the paper.

The 10-year Treasury note yield has risen to 2.64 percent, from 2.01 percent May 24.

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But rising rates aren't necessarily a bad thing for real estate, industry pros note to The Journal.

"If rates are rising because the economy is improving, it's generally going to be positive for earnings growth" at real estate businesses, Paul Morgan, managing director at investment bank MLV & Co., told the paper.

If economic growth indeed accelerates, real estate properties can generate more income for investors, as demand for space picks up, pushing rents higher.

"As the economy gets better and we add more jobs, you can't produce more supply overnight. . . . [So] we'll start to see landlords have pricing power," Marc Halle, manager of the Prudential Global Real Estate Fund, told The Journal.

One housing analyst who's not so bullish on that sector is Yale economist Robert Shiller.

"It's a mixed picture," he told CNBC. "I don't know where home prices are going to go. This might be the beginning of a slowdown, [or] it could be the beginning of a bubble. But I don't know."

The S&P/Case-Shiller index of home prices soared 12.4 percent in the year through July, a seven-year high.

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