When the same questions were posed in July 2009, 66% of respondents expected the volume of commercial real estate transactions to rebound in 2010, with the remainder predicting it wouldn't increase until 2011 or later. This month, 50% are still holding out hope for a recovery in the second half of 2010 while the other half now predicts 2011 or 2012, with 20% predicting 2012. Broken down by respondent, investors were slightly more pessimistic, with their median expectation for the timing of a recovery running one quarter behind that of brokers or commercial property owners.

As for whether CRE prices have hit bottom, a majority of all three groups said they had not bottomed out. In July, 52% of respondents expected to see future declines of 11% or more. This month, that number is more or less unchanged, with 53% still expecting future declines of 11% or more, suggesting that future expectations of cash flow and value have continued to deteriorate (or at best remain uncertain). Owners were the most optimistic, with 20% believing prices had already bottomed out. The most common prediction for when prices would hit bottom was the second quarter of 2010 but more than 10% said it wouldn't occur until 2012.

Not surprisingly, respondents listed the biggest barriers to a recovery as a lack of debt financing followed by high asking prices. Of course, owners considered high asking prices less of an issue than the others.