Constuction Spending: April 2011

Today, the U.S. Census Bureau released their March read of construction spending showing near-cycle low levels of spending for residential construction while indicating a slight improvement for non-residential spending.

On a month-to-month basis, total residential spending increased 3.14% from March falling 12.15% below the level seen in April 2010 and a whopping 65.68% below the peak level seen in 2006 while single family construction spending declined 0.95% since March falling 12.83% since April 2010 and whopping 77.75% below it's peak in 2006.

Non-residential construction spending increased 0.50% since March but declined 8.50% since April 2010 and a whopping 41.16% below the peak level reached in October 2008.

The following charts (click for larger dynamic versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year, month-to-month and peak percent change to each since 1994 and 2000 – 2005.

Commercial Cataclysm!: Moody’s/REAL Commercial Property Price Index August 2009

The most recent results of the Moody’s/REAL Commercial Property Index continues to suggest that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 32.80% on a year-over-year basis and a stunning 40.62% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Commercial Cataclysm?: Moody’s/REAL Commercial Property Price Index June 2009

Today's results of the Moody’s/REAL Commercial Property Index continues to suggest that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 26.85% on a year-over-year basis and a stunning 35.41% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Commercial Catastrophe!: MIT/CRE Commercial Property Index Q2 2009

It’s now perfectly obvious that the commercial real estate (CRE) markets have followed the inevitable lead of the residential markets down into a severe and historic recessionary decline.

Earlier this week the MIT Center for Real Estate released their Q2 2009 read on the nation’s commercial property market showing a stunning 32.07% year-over-year decline to the price of all commercial structures as an aggregate and a 36.33% decline in demand.

Worse yet, on a peak basis CRE prices have declined a staggering 39.16%.

Individually, Apartment property prices declined 28.81%, Industrial property prices declined 41.15%, office property prices declined 33.39% and retail property prices declined 26.01% compared to their respective peaks set in 2007.

Commercial Cataclysm?: Moody’s/REAL Commercial Property Price Index April 2009

The latest results of the Moody’s/REAL Commercial Property Index strongly suggests that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 25.34% on a year-over-year basis and a stunning 29.48% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Bull Trip!: GDP Report Q1 2009 (Preliminary)

Today, the Bureau of Economic Analysis (BEA) released their second installment of the Q1 2009 GDP report showing a (revised) significant contraction with GDP declining at an annual rate of -5.7%.

Easily the most notable features of today’s report are the stunning declines to residential and non-residential as well as exports of both goods and services.

Fixed investment provided significant drags on growth with non-residential investment declining a whopping -36.9% and residential investment plunging -38.7% while net exports of goods and services declined -28.7%.

Making a positive contribution to GDP were equally stunning declines to imports of goods and services slumping -34.1% as well as positive personal consumption expenditures increasing 1.5%.

The following chart shows real residential and non-residential fixed investment versus overall GDP since Q1 2003 (click for larger version).

Commercial Cataclysm?: Moody’s/REAL Commercial Property Price Index March 2009

The latest results of the Moody’s/REAL Commercial Property Index strongly suggests that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 20.79% on a year-over-year basis and 22.83% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Commercial Catastrophe?: MIT/CRE Commercial Property Index Q1 2009

It’s now perfectly obvious that the commercial real estate (CRE) markets have followed the inevitable lead of the residential markets down into an historic recessionary decline.

Earlier this week the MIT Center for Real Estate released their Q1 2009 read on the nation’s commercial property market showing a stunning 20.71% year-over-year decline to the price of all commercial structures as an aggregate and a 27.98% decline in demand.

Worse yet, on a peak basis CRE prices have declined a staggering 26.43%.

Individually, Apartment property prices declined 22.75%, Industrial property prices declined 33.46%, Office property prices declined 23.72% and retail property prices declined 15.49% compared to their respective peaks set in 2007.


Looking at the supply and demand indices of the “All Properties” index appears to shed some light on the factors now working to drive prices lower.

Construction Spending: March 2009

Today, the U.S. Census Bureau released their March read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures which appears to have worsened significantly in recent months while non-residential spending continues to show firm signs of significant contraction.

With the tremendous weakening trend continuing, total residential construction spending fell 34.02% as compared to March 2008 and a whopping 61.80% from the peak set in March 2006.

Worse off though was private single family residential construction spending which declined 51.58% as compared to March 2008 and a truly grotesque 77.86% from the peak set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private construction spending, posted a year-over-year increase of 1.16% but likely remains in a contraction trend as vacancy rates continue to soar and prices decline.

The following charts (click for larger versions) show private residential construction spending, private residential single family construction spending and private non-residential construction spending broken out and plotted since 1993 along with the year-over-year and peak percent change to each since 1994 and 2000 – 2005.

Commercial Cataclysm?: Moody’s/REAL Commercial Property Price Index February 2009

The latest results of the Moody’s/REAL Commercial Property Index strongly suggests that the nation’s commercial real estate markets are now firmly experiencing a tremendous downturn with prices plummeting a whopping 21.24% on a year-over-year basis and a stunning 21.49% since the peak set in October 2007.

The Moody’s/REAL CPPI data series is produced by the MIT/CRE but is noted to be “complimentary” to their alternative transaction based index (TBI) as it is published monthly and is formulated from a completely different dataset supplied by Real Capital Analytics, Inc.

Production Pullback: Industrial Production March 2009

Today, the Federal Reserve released their monthly read of industrial production showing a further continuation of the simply stunning declines to the aggregate production and widespread declines across many industries, particularly those related to consumer spending, construction, business vehicles and HVAC, resulting in a significant year-over-year decline to the total index of 12.78% as compared to March 2008 and a 1.48% decline since February 2008.

“Final product” consumer durable goods continue to show weakness falling 22.80% as an aggregate on a year-over-year basis, with particularly significant declines coming specifically from home appliances, furniture and carpeting which declined by 20.69% on a year-over-year basis.

Construction supply production has been showing the most severe contraction seen in at least the last 20 years with wood products falling 29.26% on a year-over-year basis.

Although automotive production has been showing weakness since the middle of 2004, business vehicle production is now showing a stark contraction.

Finally, HVAC (heating ventilation and air conditioning) appears to be firmly reflecting the substantial pullback in fixed commercial investment falling a stunning 31.66% on a year-over-year basis.

The following charts (click for larger) show the overall consumer durable component along with the Home Appliances, Furniture and Carpeting sub-component on both a time series and year-over-year basis, construction supply production with the wood products sub-component, and general and business related vehicle production all overlaid with the last two recessions for comparisons purposes.