US commercial real estate prices resume steep declines

Source

Moody's: US commercial real estate prices resume steep declines in July

New York, September 21, 2009 --

Commercial real estate prices as measured by Moody's/REAL Commercial Property Price Indices (CPPI) renewed its steep declines and low transaction volume in July, Moody's Investors Service reports. The CPPI was down 5.1% from June after having declined by only 1% the prior month. It is now 30.8% below what it was a year earlier and 38.7% below the peak measured in October of 2007.

Overall market transaction volume continued the pattern of calendar 2009. "The market has averaged about 375 sales per month for the seven months in 2009," said Moody's Managing Director Nick Levidy. "Over the same time period in 2008, sales were averaging nearly 1,100 a month."

Moody's Regional Property Type Indices show prices for apartments in the East performing significantly better than in other regions (and also better than other property types in the East). In the East, apartments have declined 6.0% in the past year, and 10.5% in the past two years, which is smaller than the decline of any other regional property type for just one year. Nationally, apartment sector prices have declined 24.4% in the past year.

Southern apartments have posted the steepest drop over the past year, at 44.2%.

Florida apartments have also seen dramatic declines in the past four quarters, declining 39.8%. Florida apartment prices are now 49.8% from their peak prices.

Other notably weak markets the Indices point to are the office and industrial markets in Southern California. In that area, office values have declined 25.8% and industrial values 24.2% since a year ago.

So the housing crash was caused, in part, by too many houses on the market at inflated rates... Here we are some months later with just about as many houses, and somehow people expect the world to be better? I have been waiting for this otherr shoe to drop, given that most of the office and retail buildings in my area are empty.

Kudos on this and the other one you posted about the deliquency and forecolsure rates.

I also love how people are doing better because they are doing less bad than others. It's like the old joke. A guy rolls through a stop sign. A cop pulls him over. He says, "Sir, you ran that sign." Guy says, "well, there was noone around, so I just slowed down." Cop pulls out his night stick and starts beating on the man. Cop says, "there's noone around, should I slow down or stop?"


Funny Joke. Everybody Laughs. Curtains.

[edit on 9-21-2009 by rogerstigers]

double click

[edit on 9-21-2009 by rogerstigers]

reply to post by rogerstigers


Agreed. Its tough to debate this with people, when those that argue that the recession is over, offer hope and conjecture as proof of this theory. While those of us that don't think its done have facts to show. If people willfully ignore the facts, and just say they 'just feel things will get better' or 'they always have before'..... it hard to debate that sort of thinking. Its like a person with a pain in their chest, but they refuse to see the doctor.... they just hope it'll get better regardless of what the other facts say.