Have Commercial Real Estate Prices Bottomed Out?

Investment grade real estate continued its positive trend from August with a strong 5.48% increase in September, according to CoStar Group's newly released Commercial Repeat-Sale Indices (CCRSI).

Also, for the first time since the second quarter of 2007, all four primary property types within the commercial real estate repeat sales index (office, retail, industrial and multifamily) showed an increase in pricing in the third quarter.

The CoStar investment grade real estate index remains down 4.89% from the same period last year, and down 29.08% from two years ago. However, for the third quarter, the investment grade real estate index increased 5.46%. This is a significant reversal from the previous quarter, as the investment grade real estate index was down 3.24%. The CoStar investment grade index is therefore showing positive price movement quarter over quarter...

The Census Bureau has released its survey of Residential Vacancies and Homeownership for the third quarter of 2010. They report that 14.4% of housing units are vacant.

Separately, The PulteGroup Inc., the largest U.S. homebuilder by revenue, reported a wider third-quarter loss as the company recorded almost $1 billion in impairments and other charges amid slumping home sales.

On Tuesday, October 26 the Wall Street Journal reported "Home sales picked up in September, but the long-term picture for housing is growing grimmer, say analysts and economists who are pushing back forecasts for a housing recovery...Now, some economists don't see a recovery until late next year or early 2012."

On Wednesday, October 27 the Journal reported "Home prices appear to be weakening, which could create a drag on the economy and leave more homeowners stuck with houses worth less than their mortgages. Home prices slipped in August according to the S&P Case-Shiller home-price indexes."

Here's a link to an article that summarizes the 2010 changes to the Georgia property tax law:

http://georgia.realestaterama.com/2010/04/30/georgia-property-owners-triumph-with-general-assembly-passage-sb-346-ID0198.html

As reported in today's Wall Street Journal:

New Home Construction Rose 4.4% in September
... Even though the level of monthly housing starts is up...by the standards of the last 50 years, it is still low, noted New York Federal Reserve Bank President William Dudley in remarks to reporters Tuesday.

FDIC Aims to Shed Some Real-Estate Assets
With more banks collapsing because of commercial real-estate lending, the Federal Deposit Insurance Corp. is working on a new way to sell failed banks' hard-to-value real-estate assets back to the private sector, according to people familiar with the matter...commercial mortgages have been rising as "a source of distress" for banks in addition to construction and land loans.

My take: Neither residential nor commercial real estate are out of the "woods" yet.

Mecklenburg County property owners! Check the assessor's property description now before it gets changed for the early 2011 revaluation. Do the before and after check...and a reality check!

http://meckcama.co.mecklenburg.nc.us/relookup/

Here's your link to all of the Georgia Counties Assessors websites:

http://www.gaassessors.com/