Commercial property prices made small gains in June

8/23/2011

Commercial property prices are inching upward, a possible sign of real estate market gains.

Moody's Investors Service marked a June increase of 0.9 percent, the second month in a row showing price gains. Although numbers are significantly lower than pre-recession rates, the improvement may be an indication that the bottom of the market has been reached and further industry gains are around the corner.

"These results are consistent with institutional investors moving beyond trophy assets and top-tier markets in search of higher yield," Moody's researcher Tadd Philipp said, as reported by The Wall Street Journal.

Despite the sign of growth in the market, gains may not become substantial for a while because of recent economic turmoil. The Standard and Poor's downgrade of U.S. credit and Europe's debt problems added to the rollercoaster stock market of August, and may slow what could have been the beginning of significant price increases.

As stock market fears ebb and the downgrade fades, commercial property prices may continue to rise and the real estate market may rebound, possibly bringing about an increase in business loans. Business expansion is paramount to creating jobs and lowering unemployment.