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NAR: CRE Decline Starts to Moderate

WASHINGTON, DC-The National Association of Realtors is reporting the capital flows are improving for commercial real estate.

By Erika Morphy | Updated on August 20, 2009

WASHINGTON, DC-The decline in commercial real estate appears to be slowing, at least according to the latest statistics from the National Association of Realtors. So suggests its leading economic indicator, which registered only a 1.3 percentage point decline in its Commercial Leading Indicator for Brokerage Activity for Q2. The index reading was 101.5, compared to 102.8 in Q1. The index is at its lowest point since its inception in Q1 1994–as well as a steep drop from Q2 2008, when it was at 117.6.

“The decline is moderating a bit–we can hope that the steep declines may be coming to an end–but we are not nearly back to normal,” Lawrence Yun, NAR chief economist, tells GlobeSt.com.

The slight easing of credit and introduction of liquidity into the sector is largely the reason, he continues. TALF was extended for a few months beyond the December 2009 expiration date, Yun notes. Also, “there has been a nice gain in the REIT stock price index, which implies that credit conditions may be loosening.”

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