Moody’s Property Prices Up 101% From 2010

Commercial property prices have more than doubled since the January 2010 financial crisis low-water mark, reported Moody’s Investor’s Service, New York.

Moody’s said property prices now stand 21 percent above the November 2007 pre-crisis peak. Apartment prices are nearly 50 percent above their pre-crisis peak while core commercial prices are up 11 percent.

But price appreciation has slowed this year, said Green Street Advisors Green Street Advisors Senior Analyst Peter Rothemund. “Pricing for most types of commercial property is still at, or near, all-time highs, but the gains have stopped coming,” he said. “That doesn’t necessarily mean were about to head the other way. We’ve just hit a plateau.”

Green Street’s pricing index indicated that prices rose less than 1 percent over the past three months and 3 percent for the year so far.

Moody’s said the retail sector represents the only core commercial segment to see a price decline over the past three months. Retail property prices fell 0.6 percent. Office property prices rose 3.1 percent while industrial property prices rose 2.8 percent. Apartment property prices are also up 2.8 percent.

CoStar, Washington, D.C., said its price index continued to advance in the third quarter. The CRE research firm’s price index advanced by a “healthy” 2.9 percent between July and September. Its value-weighted index, which tracks large higher-quality assets, now stands 26.4 percent above its pre-recession peak, while CoStar’s equal-weighted index, which tracks smaller property sales, surpassed its pre-recession high-water mark in September by moving 0.8 percent above its August 2007 level.

CoStar noted that price growth accelerated most significantly in the west and the south, which have experienced 2.2 percent and 2.1 percent price growth, respectively so far in 2016, “handily outpacing” northeast and Midwest regional growth.

Moody’s called price growth in major and non-major markets “comparable” over the last 12 months, with each up nearly 8 percent.