Interesting Times

Moody's says US commercial real estate prices increase 4.1% in December.

 US commercial real estate prices as measured by Moody's/REAL Commercial Property Price Indices (CPPI) increased for the second month in a row in December, rising 4.1%. 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.

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."

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.

Market Report, MSN Money, 2-22-2010