According to PR News Wire, the commercial real estate market price gain have shown signs of slowing down over the previous months, but year-over-year CRE pricing is still steadily increasing. A new pricing index based on Google Trend data, Auction.com's database and investor surveys shows that three property segments namely residential, commercial and industrial real estate have seen increase in valuations in the month.
Moreover, Industrial assessments showed that highest gains, rising up to 2.7 percent and making the present level 17.6 percent higher than the level in 2014.
In addition PR News Wire says, "Office valuations increased 47 basis points and retail increased 41 basis points. Hotel valuations were off slightly, down 15 basis points, while apartments saw the most substantial decline, down 67 basis points for the month.
According to Auction.com Chief Economist Peter Muoio, "While there are significant differences in pricing across each of the individual property segments, year-over-year price growth remains healthy across all CRE sectors and sales volume remains relatively strong. Overall, prices have appreciated by 12.9 percent according to the nowcast - an almost identical figure to the prior six months. Interestingly, investors seem particularly bullish on the industrial sector, which has shown a healthy year-over-year increase."
On the other hand PR News Wire quotes Auction.com Executive Vice President Rick Sharga, "It will be interesting to see what effect higher capital costs have on CRE sales volume and pricing. The availability of low cost capital has been one of the elements fueling the CRE market for the last few years, and in some cases we've seen prices outpace the underlying fundamentals with investors buying properties with relatively low cap rates and relatively high risk premiums."
To see November Nowcast Results, Click here.
