letthetruthout US commercial property prices rise in June

Increase represents a ?firming up? of the market bottom as investors moved beyond trophy properties

New York: US commercial property prices rose 0.9 per cent in June, the second straight monthly gain, as buyers increased purchases in smaller cities in search of higher returns, according to Moody?s Investors Service.

The index, which measures broad price trends, is down 6.6 per cent from a year earlier and 45 per cent below the peak of October 2007, the company said in a report.

The increase represents a ?firming up? of the market bottom as investors moved beyond trophy properties and major US coastal cities, Moody?s said.

Turmoil in capital markets and a recent drop-off in lending of commercial mortgage backed securities may delay ?significant? near-term price increases, according to the report.

Europe?s debt crisis, signs the US will remain mired in sluggish growth through next year and the Standard & Poor?s downgrade of the nation?s credit rating roiled financial markets and triggered a selloff in securities linked to debt on commercial real estate.

Wall Street firms are ratcheting back originating new commercial-property loans to package for sale, making it harder for banks to gauge how much cash they will recoup in bond sales and boosting rates for borrowers.

Slow pace

The Moody?s index tracks repeat sales, which totalled 254 in June. The result reflects deals that came before economic reports issued in July and August showed growth is slowing and unemployment remained at more than 9 per cent, which may reduce transactions and push down prices.

The US economy grew at a 1.3 per cent annual rate in the second quarter after a 0.4 per cent gain in the prior three months that was less than earlier estimated, Commerce Department figures showed July 29.

Consumer spending from April through June had its smallest gain since the second quarter of 2009, when the economy was in recession.

CoStar Group Inc?s National All Property Type Composite Index climbed 2.2 per cent from May, the second straight month that measure gained, the Washington-based real estate data provider said August 10. The index was down 1.5 per cent from a year earlier and is 33 per cent below a peak reached in 2007.

Green Street Advisors Inc, a real estate research company in Newport Beach, California, reported commercial property values were unchanged in July from the previous month and up 18 per cent from a year earlier.

Prices are down 10 per cent from their peak, the company said August 4.

Green Street?s index is weighted by asset value and includes deals that are in negotiation or under contract.

Moody?s tracks completed sales, which are equally weighted in calculating the index.

Increase in short home sales

US homes nearing foreclosure accounted for 12 per cent of total sales in the second quarter as banks agreed to more sales at prices below the outstanding mortgage balance, RealtyTrac Inc said.

The proportion of sales of homes in default or scheduled for auction rose from 10 per cent a year earlier and was little changed from the first quarter, the Irvine, California-based information company said in a report. Most of those were short sales, or transactions for less than the mortgage debt, according to RealtyTrac.

An increase in short sales, along with a shorter average time to sell such homes and bigger discounts relative to normal deals, indicate the market is clearing distressed properties more efficiently, CEO James J. Saccacio said in the statement.

Total pre-foreclosure sales rose 19 per cent from the first quarter, while slipping 12 per cent from a year earlier, when a federal tax credit pumped up demand.

?This is a glimmer of hope that lenders are getting more realistic,? Rick Sharga, senior vice-president of RealtyTrac, said.

Source: http://letthetruthout.com/2011/08/us-commercial-property-prices-rise-in-june/

cheap car insurance cheap car insurance aed shape shape a day to remember hightower