Constuction Spending: Januray 2010

Today, the U.S. Census Bureau released their January read of construction spending showing a continued slowing of the government’s tax-carrot fueled bounce in residential construction spending while indicating continued weakness to non-residential construction spending.

Even with the governments tax-credit gimmick, residential construction spending is still 6.43% below the level seen last year and a whopping 61.44% below the peak set in March 2006.

Worse off though was private single family residential construction spending which declined 8.61% as compared to December 2008 and a truly grotesque 75.74% from the peak set in February 2006.

Non-residential construction spending, currently accounting for over half of all private construction spending, posted another significant year-over-year decline of 19.91%.

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 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.

Material Pullback!

It appears that the "Green Shoots" have not found their way through the still smoldering patches of durable material production.

Yesterday’s Industrial Production report showed that in May, durable materials continued its staggering decline, nearly the worst on record (second only to 1949s major decline) with a 26% YOY contractions and a 2% loss since just last month.

Now that's a Material Pullback! (click the following for super-surf-able-dynamic chart!)

Construction Spending: April 2009

Today, the U.S. Census Bureau released their April 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 a tepid increase.

With the tremendous weakening trend continuing, total residential construction spending fell 35.03% as compared to April 2008 and a whopping 63.16% from the peak set in March 2006.

Worse off though was private single family residential construction spending which declined 53.02% as compared to April 2008 and a truly grotesque 79.39% from the peak set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private construction spending, posted another year-over-year increase of 1.99% but likely remains in a contraction trend as vacancy rates continue to soar while rents 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 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 January 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 19.08% on a year-over-year basis and a stunning 21% 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.

Construction Spending: January 2009

Today, the U.S. Census Bureau released their January 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 28% as compared to January 2008 and 56.90% from the peak set in March 2006.

Worse off though was private single family residential construction spending which declined 46% as compared to January 2008 and a truly grotesque 72.80% from the peak set in February 2006.

Non-residential construction spending, currently accounting for just under half of all private construction spending, has been expanding at a ever slower annual rate in recent months with January showing just a .34% increase as compared to January 2008 but posting the fourth consecutive monthly decline.

As was noted in prior posts, commercial real estate (CRE) appears to be clearly coming under some pressure with reports of increasing vacancy rates and falling prices and now a back-to-back monthly decline in spending.

Keep your eye on the last two charts in the months to come for a clearer indication of a pullback.

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 October 2008

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.

The latest results reflecting national data for all property types settled through October strongly suggest that prices for commercial real estate have eroded significantly.

Taken together, the MIT/CRE Commercial Property Index, S&P/GRA Commercial Real Estate Index and the Moody’s/REAL CPPI all appear to be firmly indicating that the nation’s commercial real estate markets are experiencing a significant decline.