Evidence that values are taking a turn

I read a lot of real estate newsletters and press releases relating to commercial real estate.  This week I came across two separate reports showing multifamily values have hit bottom.  The first a press release by Integra Realty Resources says their multifamily index has shown values stabilizing.  They say the data suggests values will increase over the next six months.   The press release (found here) does not give much real data but says you can get additional information and charts if you contact them.

There was also some good information in the current issue of the newsletter The Watch List.  This is published by the Costar group the provider of real estate sales data and analysis.  I usually find this newsletter a rehash, but good synopsis, of items I find in many publications.  However, this issue had some exciting new information.  Evidently the CoStar group is doing frequent analysis of properties that resell over time.  These “sales pairs” are one of the best indication of value changes as they are not market averages, but sale changes on individual properties thus there is little noise in the data relating to the quality of properties sold in any one period. 

Below is some of the data they show;

                                      1 month earlier              1 qtr earlier        1 year earlier

All Apartments                 -4.8                                  -8.6                          -22.7

Northeast – Apts               3.5                                   7.8                            -8.6

West – Apts                     -8.9                                  -12.7                         -21.2

Midwest – Apts             -10.3                                -25.1                         -38.5

South – Apts                  1.0                                      -8.5                           30.9

While the data is a bit confusing and I really don’t know exactly what it means, but I think its clear that the drop in values is reducing and in some markets have converted to actual price increases.   Hopefully this trend will continue and we will see positive gains in all markets.