by Bill McBride on 11/03/2009 02:14:00 PM
Tuesday, November 03, 2009
The different price indexes can be confusing ...
From MIT: MIT commercial property price index posts first increase in over a year
The 4.4 percent increase in the transactions-based index (TBI) for the third quarter is the first positive price change in the index in over a year, and the largest increase since before the market downturn began in mid-2007. While the price index is now 36.5 percent below its 2007 peak, it is not as low as the 39 percent deficit seen last quarter — suggesting that the U.S. commercial property market may have finally found a price bottom.But this isn't the Moody’s/REAL Commercial Property Price Index (CPPI) that is reported every month. The CPPI showed commercial real estate prices fell 3 percent in August, and are down almost 41 percent since the peak in October 2007.
The transactions-based index (TBI) is a quarterly index for commercial properties sold by major institutional investors. According to MIT professor David Geltner, the TBI probably includes fewer distressed properties:
The types of properties and owners tracked by the TBI would generally be less subject to distress than those tracked by the CPPI.A couple of points:
Posted by Bill McBride on 11/03/2009 02:14:00 PM