The report notes that although value declines began first in the residential sector, the overall declines have been larger for commercial properties. Citing the Case Shiller Index, the report observes that home prices peaked in August 2006, more than a year before the October 2007 peak in the commercial sector. Home prices then fell for more than two-and-a-half years, bottoming out this past April, with nearly a one-third value loss. "Since April, prices have rebounded slightly, but have seen no significant growth in the last two months' returns," the report says.

In contrast, commercial property prices fell further over a shorter period of time. "After two years of value declines, commercial real estate reached its lowest value yet in October '09, nearly 44% below the peak level," the Moody's/REAL report says. "Prices in the commercial sector will rebound off the bottom as markets recover, but we expect that commercial property prices will ultimately flatten out for the longer term at levels 30% to 40% below the peak."

In October, a few weeks before the index reached its lowest point to date, REAL president Neal Elkin told GlobeSt.com that price declines were tapering off. "It looks as though we're finally reaching levels that some people believe represent fair value," Neal Elkin, president of REAL, tells GlobeSt.com. "You've got this combination of moving enough so that there's an opportunity at these levels, and growing pressure on the distressed sellers to cross the bid-offer spread and move the assets. Both of these things are contributing to stabilization of prices and a slight uptick in volume, although nothing I can get really excited about."