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Maybe the US commercial real estate market is turning around. Prices as measured by Moody’s/REAL Commercial Property Price Indices (CPPI) increased 3.6% in May. It was the second monthly increase in a row, after a 1.7% rise in April.

"We expect commercial real estate prices to remain choppy in the coming months,” said Moody’s Managing Director Nick Levidy.

The positive news of increasing prices over the past two months is tempered by low transaction volumes, forecasts for slowing macroeconomic growth and the rising risk of a double dip recession.

Prices are currently 38.9% below the peak that was recorded in October 2007, and have recovered 8.6% since the recession low that occurred in October 2009. In the past year, prices are down 6.3%, while in the past two years prices have dropped 33.0%.

In May there were 107 repeat sales, down slightly from the 114 repeat sales in April. By dollar volume, the amount of repeat sales almost doubled, going up to over $1.5 billion in May from less than $800 million in April. (Click to enlarge)

May CPPI

Source: U.S. Commercial Property Prices Rise for Second Straight Month