The National composite reported an annual price appreciation of +1.5%, versus June of 2007, down from the +3.6% reported in May's data. This is well below this cycle's peak of +14.7%, in August of 2006, and the lowest growth rate reported since May 2001, which was +1.7%.
The National composite was flat in June versus May. Four of the regions reported positive monthly returns, while the Pacific West was the lone declining region for the month, returning -1.1%. The Northeast performed the best during the June/May period, returning +0.8%; however, the index is now reporting year-over-year declines, down 0.7% in June versus June 2007. This is its first negative reading since July 1995, which was -1.4% Over the 12 month period, the Midwest had the highest return of +4.9%. Furthermore, every month since February, the Midwest has shown a positive monthly return. Only two of the five regions - the Mid Atlantic South and the Desert Mountain West - saw acceleration in their annual growth rates over last month. For the Desert Mountain West, however, the annual growth rates are still negative, and have been for the past four months.
In the property sector, two of the four sectors reported positive returns over the June/May period. Office had the biggest gain for the third straight month, reporting a one-month return of +1.1% in June. As in the case of the Northeast above, it was not enough to keep the index from turning negative on an annual basis. Offices are down 0.2% in June versus June 2007. This is the first negative value since July 2008, which was -0.8%. Apartments, down 1.0% for the month, reported the highest annual return, +3.6%, but this is a marked deceleration from the +7.7% reported just three months ago. The retail sector grew at just 0.6% on an annual basis, one of the lowest readings since 2001, and significantly down from its June 2007 high of +15.1%.
"While there are some pockets of relative stability in this month's numbers, overall the S&P/GRA Commercial Real Estate Indices appear to be trending down", says David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor's. "The results for commercial real estate were mixed for the month. The National composite was flat for the month and is up 1.5% from June 2007. Only one of the regions and two of the property sectors saw price declines during the June/May period; however, most of the regions and sectors continue to show deceleration on an annual basis. Two regions, the Desert Mountain West and Northeast, are reporting declines over the past year, returning -1.7% and -0.7%, respectively. In the property sector, offices are now reporting annual declines, down 0.2%."
