In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Thursday, June 11, 2015

CoStar: Commercial Real Estate prices declined in April, Up Solidly YoY

by Calculated Risk on 6/11/2015 07:32:00 PM

Friday:
• At 8:30 AM ET, the Producer Price Index for May from the BLS. The consensus is for a 0.4% increase in prices, and a 0.1% increase in core PPI.

• At 10:00 AM, University of Michigan's Consumer sentiment index (preliminary for June). The consensus is for a reading of 91.2, up from 90.7 in May.

Here is a price index for commercial real estate that I follow. 

From CoStar: Commercial Real Estate Price Growth Moderated In April Following First Quarter Surge

COMPOSITE PRICE INDICES LEVEL OFF IN APRIL. Following strong gains of more than 5% in the first quarter of 2015, composite CRE prices saw a slight dip in April as overall sales activity moderated from its recent robust pace. The value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index decreased by 0.7% and 0.8%, respectively, in the month of April. Both indices have risen more than 2% over the last three months and are up more than 12% for the annual period ending in April 2015.
...
DISTRESS SALES CONTINUE TO DECLINE. The distress percentage of total observed sale pair counts fell to 6.2% in the first four months of 2015, well down from a peak of 32% in 2010.
emphasis added
Commercial Real Estate Prices Click on graph for larger image.

This graph from CoStar shows the the value-weighted U.S. Composite Index and the equal-weighted U.S. Composite Index indexes.

The value-weighted index declined 0.7% in April and is up 12.8% year-over-year.

The equal-weighted index declined 0.8% in April and up 14.5% year-over-year.

Commercial Real Estate Distress SalesThe second graph shows the percent of distressed "pairs".

The distressed share is down significantly and is close to late 2008 levels.

Note: These are repeat sales indexes - like Case-Shiller for residential - but this is based on far fewer pairs.