Monday, November 29, 2010

Market Volatility May Be The Watchword (For A While)

The market goes up, the market goes down.

And we're not just talking about stocks, but some commercial real estate values. Generally, we are seeing improvements in values across the board, but is it a pattern? The jury is out on that just yet...

There were gains in reported commercial real estate prices in September in Moody's, and in October in Real Capital Analytics. Specifically, the Moody's REAL Commercial Property Price Indices increased 4.3 percent in September, the largest gain in the history of the CPPI, according to Globe Street news service in interviews with industry gurus. Ironically, the previous month's report noted that commercial property prices slipped to their lowest levels in 10 months.

All this just further illustrates the volatility brokers and investors face.

For the full story at Globe Street, click here. All in all it is an interesting overview, showing declines in multi=unit housing in the Top 10 MSAs. Yet office is up and industrial slipped hard. In Central Ohio, industrial -- while hard hit earlier -- seems to be climbing back, office is stable and retail is improving. And MUH? Well in this area, except for distressed B & C properties, apartments have stayed very stable and even strengthened in value.

It just goes to show that national stats cannot be applied to local or even regional trends. Columbus is not Las Vegas is not Cleveland is not Fort Myers is not Austin is not Los Angeles ..... and so on. Nevertheless, we still have some volatility ahead, and the question of whether lenders will dump commercial properties still is top of mind. Conventional wisdom says we will see a tsunami of sorts with commercial being dumped on the market in 2011.

Time will tell.....

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