U.S. Commercial Real Estate Prices Down 8.8% from Peak

US commercial real estate prices have registered their largest monthly decline since the inception of the Moody’s/REAL Index.

Moody’s said the Index stood at 174.97 in May, down 3.5% from the previous month, and 5.7% below the same period last year. This represents three consecutive months of negative returns, and the largest one-month drop since the inception of the index. Nonetheless, the CPPI still logs an increase of 3.9% over a two-year time period.

The index now stands 8.8% below the peak in October 2007.

Moody’s also noted that the average transaction price is steadily falling as transaction activity continues to shift to lower priced assets.

 

Details by region and type are available in Moody’s/REAL Commercial Property Price Indices, July 2008.

Comments

[Jerry Dill]

There is no surprise here. I am more interested in when the housing market will be bottoming out. I still see a downward future for the next couple months but it is a little cloudy after that.

[investor88]

It is hard to see beyond a quarter or two but agree the next few months the trend is down. Strategy wise maybe it is better to get into financial markets after we see a bottom/the bottom [as far as we make out since we never know at the point it bottoms]. We might miss some but we are compensated somewhat by expected lower risk after the bottom is reached. Following this line of reasoning I am keeping a high level of cash in my portfolio, a small portion is reserved to trade long or short.