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U.S. Commercial Real Estate Prices Down 8.8% from Peak

by: Research Recap July 22, 2008    

Research Recap

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US commercial real estate prices have registered their largest monthly decline since the inception of the Moody’s/REAL Index.

Moody’s said the Index stood at 174.97 in May, down 3.5% from the previous month, and 5.7% below the same period last year. This represents three consecutive months of negative returns, and the largest one-month drop since the inception of the index. Nonetheless, the CPPI still logs an increase of 3.9% over a two-year time period.

The index now stands 8.8% below the peak in October 2007.

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Moody’s also noted that the average transaction price is steadily falling as transaction activity continues to shift to lower priced assets.

 

Details by region and type are available in Moody’s/REAL Commercial Property Price Indices, July 2008.

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This article has 2 comments:

  •  
    Jul 22 12:01 PM
    There is no surprise here. I am more interested in when the housing market will be bottoming out. I still see a downward future for the next couple months but it is a little cloudy after that.
    Reply
  •  
    Jul 22 01:13 PM
    It is hard to see beyond a quarter or two but agree the next few months the trend is down. Strategy wise maybe it is better to get into financial markets after we see a bottom/the bottom [as far as we make out since we never know at the point it bottoms]. We might miss some but we are compensated somewhat by expected lower risk after the bottom is reached. Following this line of reasoning I am keeping a high level of cash in my portfolio, a small portion is reserved to trade long or short.
    Reply
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