Last week, in Commercial Real Estate Problems Piling Up, I opined that commercial real estate is a likely candidate to usher in the next leg of the financial crisis. Since the S&P/Case-Shiller Home Price Index gets so much publicity, I thought this would be a good opportunity to mention a commercial real estate index that deserves more attention: the Moodys/REAL Commercial Property Price Index.
This index (click to enlarge) was last updated April 24th and shows that prices have dropped slightly more than 20% since the October 2007 peak.
While residential prices are important to watch, most of the residential story has already been told. The rest of the real estate story – good or bad – likely lies on the commercial side.