A recent Moody’s Investor Service report shows United States commercial property prices climbed 0.6% in November 2010 from October, the third successive gain, as the country’s economy shows signs for further recovery. Moody’s/REAL’s index for commercial property price also shows another 2.8 percent increase for commercial property prices from 2009.
According to the report, commercial property prices rose to about 6.4 percent in August— from an almost eight consecutive year- low.
In 2010, the current U.S economy facilitated the additional 1.1 million jobs, the biggest number of jobs added since 2006 that help to improve the commercial property prices in the country.
The rising employment help supports the demand for office commercial properties, the biggest sector in the commercial property market, said an economist at Moody’s Analytics.
Moody’s/REAL index is down by 24 percent from its Oct. 2007 peak, and based on repeat- sales deals, the index measures the overall commercial property prices on a monthly basis.
In November 2010, about $1.7 billion worth of repeat- sales transactions were recorded or about 121 repeat- sales, compared to only $1.4 billion in October or about 110 repeat- sales transactions.
However, according to the report, about 24 percent of repeat- sales in November were from default or foreclosed/bank-owned properties.
A real estate data service firm, CoStar Group also found out that commercial property prices for investment-grade assets in the U.S fell about 4.1% in November from the previous month.
Moody’s said, the instability of the commercial property prices’ index over the last 12 months mirrors the overall uncertainty on how large and staying force of the country and Europe’s macroenomic recovery.