Monday, September 20, 2010

Moody's: Commercial Real Estate Price Index declined 3.1% in July

by Bill McBride on 9/20/2010 01:08:00 PM

Moody's reported today that the Moody’s/REAL All Property Type Aggregate Index declined 3.1% in July. This is a repeat sales measure of commercial real estate prices.

Below is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index.

Notes: Beware of the "Real" in the title - this index is not inflation adjusted. Moody's CRE price index is a repeat sales index like Case-Shiller - but there are far fewer commercial sales - and that can impact prices.

CRE and Residential Price indexes Click on graph for larger image in new window.

CRE prices only go back to December 2000.

The Case-Shiller Composite 20 residential index is in blue (with Dec 2000 set to 1.0 to line up the indexes).

It is important to remember that the number of transactions is very low and there are a large percentage of distressed sales.

  • Commercial real estate prices (as measured by this index) fell 7% combined in June and July.

  • The index is now down 43.2% from the peak in October 2007.

  • The index is only 0.9% above the October 2009 low.