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CRE update

I included this chart in yesterday's post (20 bullish charts), only to discover today that I had neglected to update the chart for the June release of the commercial property index, which declined 4%. I don't think that changes the interpretation of the chart however. My eyeball says that commercial and residential property prices have been flat to slightly up for the past year, and that's encouraging. You need stabilization and consolidation, and that's what we are seeing.

This would be a good place to note that the prices of commercial real estate-backed securities (CMBS) have been trending higher for the past several months. This is happening because property prices have stabilized at a time when the market was expecting further declines. In other words, defaults have been lower than expected.

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