by Calculated Risk on 10/24/2011 11:22:00 AM
Monday, October 24, 2011
Moody's: Commercial Real Estate Prices increased 2.4% in August
From Bloomberg: Moody’s U.S. Commercial Property Index Rose 2.4% in August
The Moody’s/REAL Commercial Property Price Index advanced 2.4 percent from July. It’s up 7.2 percent from a year earlier ... Moody’s doesn’t see “significant” price gains in the near term as loan originations based on commercial-mortgage backed securities slow and demand for vacant space continues to “languish,” the company said. ... The share of distressed deals was 21.7 percent, the lowest since January 2010.Below is a comparison of the Moodys/REAL Commercial Property Price Index (CPPI) and the Case-Shiller composite 20 index. Beware of the "Real" in the title - this index is not inflation adjusted.
![CRE and Residential Price indexes](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgSLluYoTpQleeJnHCjCU4SU9b4Shh-wLe3CUAlMMbH73z7WkB1Pl1a-G1lMZqZ3dRX423cG_kEqbco0zNPvzYtZ9JMmuvzmH5UGwEgZbb9qTRrbkU6H_yq4zTVNHEV7p-mppCF/s320/CREPricesAug2011.jpg)
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).
According to Moody's, CRE prices are up 7.2% from a year ago, and down about 41% from the peak in 2007. This index is very volatile because there are relatively few transactions - and some of the recent increase was due to fewer distressed sales - and some of the increase was probably seasonal.