Editor’s Note: 34.8% drop quite a decline since 2007. The biggest item that needs to be looked at is the financing that will be available as more of these 25 year amortorized mortgages that are due in 10 years that will be hitting the market to refinance. If that is not available along with investors taking serious hits in the markets, there might not be the credit and money available to get these notes taken care of. In that case then we will see more defaults and further price declines.
News (Reuters):
U.S. commercial property prices plunged for a second straight month in May as distressed transactions weighed, but the pace of decline may signal a bottoming process, Moody’s Investors Service said on Monday.
Office, retail and apartment building prices declined 7.6 percent in May from April, compared with a record drop of 8.6 percent in the previous month, according to the Moody’s/REAL Commercial Property Price Indices.
The index covering all property types is down 34.8 percent from its peak in October 2007, nearing the range of forecasts of total declines expected by many analysts. The acceleration of recent price drops could mean that the market will soon find a bottom, Moody’s analysts said.
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