Commercial real estate prices nationwide held close to steady in July, gaining 0.4% over June 2008 levels, Moody’s Investors Service reports, based on data collected through the end of July. "This slight increase offers some relief from the steep declines of prior months, but may represent merely a temporary respite in a longer period of falling prices," says Moody’s Managing Director Nick Levidy.
In fact, compared with July 2007, prices are down 9.7%. And they are also down 11.4% from a high reached in October 2007, Moody’s reports.
The largest decrease in prices for this period is in the Florida apartment market, which registered a decline in prices of 14% over a year earlier. In the Eastern region, the office property sector continues to hold up well, compared with other property sectors, registering a mere 1.8% decline in prices over the past year. Over a two-year period, office prices have risen 13% in the Eastern region.
Moody’s attributes this relative strength in the Eastern office market to the New York and Washington, D.C., markets which saw prices rise, 2.6% and 1.6% respectively, over the past year. The strongest office market is in San Francisco, which saw prices increase 5.3% over the previous year.
In the Eastern region, the apartment market performed worst, with a 4.8% decline in prices over last year.
Nationally, transaction volume was down in July from June levels, both in terms of number and dollar volume. July transaction activity was $2.1 billion, based on 189 transactions, compared with transaction activity of $2.7 billion, based on 227 transactions for June.
The Moody’s REAL Commercial Property Prices Indices are based on the repeat sales of the same properties across the United States at different points in time.