Here’s a fresh and relatively rare bit of good news from the US commercial real estate market.
According to the Moody’s/REAL Commercial Property Price Indices (CPPI), US CRE prices rose 4.1 per cent in December, marking the second consecutive month of increases.
From Moody’s, emphasis ours:
It was the largest month-over-month increase in the nine year history of the CPPI and followed a small, 1% gain in November. The volume of transactions also rose in December, as is typical for the end of the year. Overall, 716 transactions totaling $9.0 billion were recorded in the month.
But don’t break out the champagne quite yet:
Moody’s is uncertain whether the price increases represent passing the bottom of the market or are only the volatility of a market in transition.
“Although we are unable to conclude that the bottom to the commercial real estate market is here, we do believe that the period of large price declines is over,” says Moody”s Managing Director Nick Levidy. “We will need to see data from the first few months of 2010 to develop a better picture of where things stand.”
In fact, celebration of any kind would be decidedly premature:
Moody's/REAL CPPI
As of the end of December, prices are down 29.2% from a year ago and 39.8% from two years ago. They are 40.8% below their peak values.
Related links:
US commercial real estate in good news shock – FT Alphaville
Now the Australians are worried about US CRE – FT Alphaville
‘The most serious wave of commercial real estate difficulties is just now beginning’ – FT Alphaville