NEW YORK – The commercial leading indicator for brokerage activity rose 0.9% to 102.4 in the third quarter from 101.5 in the second quarter, but remains down 11.1% from the 115.3 posted in the third quarter of last year, the National Association of Realtors said today.
The recession hit the commercial real estate sector heavily, but credit availability will determine when commercial markets recover.
“The first commercial mortgage bond deal in over a year shows the Federal Reserve’s efforts to sell securities through the TALF program can be fruitful, but the level of activity is well below what is required to resuscitate the commercial market,” said NAR chief economist Lawrence Yun. “Credit availability needs to significantly rebound for any hope of a meaningful commercial recovery in 2010.”
Yun said the modest index recovery follows steep declines in the past several quarters. “Gains in industrial production, durable goods shipments and retail sales; a rebound in the NAREIT price index; and improving figures on first-time unemployment claims were stabilizing factors,” he said. “Negative impacts include falling private sector income and fewer jobs involving commercial real estate. The office and industrial markets are the sectors most negatively impacted by the economic downturn.”
