The volume of new U.S. commercial mortgage-backed securities issued is projected to rise to $37 billion this year, Moody’s Investors Service said in a report today. According to the report, the highest end of the market is rebounding most quickly, with prices for trophy assets already on the rise. But the recovery isn’t in full speed yet, with small property prices flat-lining and distressed property values falling further still, Moody’s said. CMBS delinquencies are predicted to increase to between 9.5 percent and 11 percent by the end of the year, with a 20 percent rate for loans in special servicing. TRD [more]

U.S. commercial property prices saw their third straight monthly increase in November, up 0.6 percent over their level in October, and 2.8 percent over their level in November 2009, according to a new report from Moody’s Investors Service. Since the eight-year nationwide low of August 2009, prices have climbed by a total of 8.4 percent, aided by the addition of 1.1 million jobs last year, which helped boost demand for office properties, Bloomberg News reported. Still, prices are 42 percent below their October 2007 high. “Demand really has to kick in before you see a significant upward [pricing] trend,” said Moody’s economist Christopher Cornell. “The ones that are really headline properties are doing fairly well, others not as well.” [Bloomberg]

With U.S. home prices down by almost a third from their spring 2006 peak, property owners are flooding city and state governments with tax appeals in a trend that’s sure to put even more downward pressure on already tight budgets, according to Businessweek. New Jerseyans filed a record 18,147 appeals during the last fiscal year, up 80 percent from fiscal 2007. Meanwhile, Atlantic City has used up its entire $26 million reserve for tax appeals, and the pending appeals on all casinos there have caused the city’s credit rating to drop to three levels above speculative grade, Moody’s Investors Service said last month. In Clark County, Nev., one of the most battered real estate markets in the nation, taxable property values fell to $184 billion this year from $263 billion in 2009, and the county will lose $514 billion in taxes as a result. Across the country, it’s becoming more and more likely that local governments will need to cut more services in the coming year as a result of that loss in revenue. In South Florida, however, tax appeals are actually now on the decline after a 22 percent drop in assessments between 2008 and 2010. [Bloomberg Businessweek]

From left: Vanilla Ice, NBA star-turned Miami real estate pro John Crotty, new Miami Heat star LeBron James and a view of Miami Beach

Between the ongoing foreclosure crisis, still-declining home prices and an ominous
proclamation by Moody’s Economy.com that a full residential recovery may elude
the area for another two decades, there wasn’t a ton of good news for South Florida
real estate this year — but there was some. A slew of high-powered athletes moved
into the tri-county region, including a certain trio of Miami Heat newbies, and brokers
clamored for their attention. Meanwhile, residential market activity picked up on the
whole, spurred by foreign, all-cash buyers and short sales. The Real Deal’s readers have spoken on their 10 favorite South Florida real estate stories of the year, and here they are, ranked by the number of page views between Jan. 1 and Dec. 28. [more]

According to a recently released list of rent ratios from Moody’s — the price of a typical home divided by the annual cost of renting that home — it may be better to rent a home in certain Florida cities rather than to buy one. Out of 55 metropolitan areas across the country, Fort Lauderdale had a rent ratio of 15.7, while Miami’s ratio was slightly lower, at 15.6 “A good rule of thumb is that you should often buy when the ratio is below 15 and rent when the ratio is above 20,” according to the New York Times. “If it’s between 15 and 20, lean toward renting — unless you find a home you really like and expect to stay there for many years.” Manhattan had a rent ratio 26.7 and East Bay, Calif. was at the top of the list, with a ratio of 35.9. [NYT]

Housing experts are predicting a nationwide decline in home prices, according to CNN Money, as weak employment, tight lending and the robo-signing fiasco hamper hopes for a comeback. Analytics firm Fiserv had been optimistic regarding market stabilization earlier this year, predicting in February a 4 percent gain by the end of 2011. Now, the company has reversed its sentiment, saying it foresees a 7.1 percent drop by mid-2011. Mark Zandi, chief economist with Moody’s Analytics, said he expects home prices across the country to be down another 8 percent by this time next year. If Zandi’s prediction comes to fruition, the total peak-to-trough decline would hit 34 percent. [CNN Money]

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Commercial real estate markets continued to improve nationwide in the third quarter, with all property types tracked showing an improvement, according to a report from Moody’s released today. The Honolulu market ranked best among the cities tracked, scoring a 78 on Moody’s CMBS index, followed by New York City, which scored a 76. The hotel sector shows the greatest quarter-over-quarter improvement, climbing 30 points to a score of 54, while the central business district office market showed a five-point gain, reaching a 60-point index score. While Keith Banhazl, a Moody’s senior analyst, said that there’s reason to be optimistic, he said that the overall market is still on soft footing. “In general, the commercial real estate markets remain in the uncertain… range,” Banhazl said. “However, the future appears to brighten with each passing quarter.” TRD

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Commercial real estate prices fell 3.3 percent nationwide in August, according to Moody’s, marking the third time in a row that prices dropped between 3 percent and 4 percent month-over-month. The decline brings the Moody’s commercial property price index to its lowest point since the market downturn began, surpassing the previous low point recorded in October 2009. The index is now 45.1 percent below its peak in October 2007, according to Nick Levidy, managing director with Moody’s. “The commercial real estate market in the U.S. has become trifurcated with prices rising for performing trophy assets located in major market, [while] falling sharply for distressed assets, and remaining essentially flat for smaller healthy properties,” Levidy said. TRD

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The delinquency rate among commercial mortgage-backed securities climbed gradually in September, according to Moody’s monthly CMBS report. Delinquencies climbed 14 basis points on the Moody’s index, hitting 8.24 percent, marking the smallest monthly increase since October 2008. The 311 loans that became newly delinquent last month had a combined value of $3.8 billion and brought the total number of delinquent loans to 3,971, representing $52 billion in debt. Nick Levidy, a managing director with Moody’s, said that while the rate of increase among CMBS delinquencies was modest last month, it’s far too soon to celebrate. “This easing of the rate of growth in the delinquency rate does not necessarily portend a near-term improvement in the market,” Levidy said. “The number and balance of loans becoming newly delinquent remain high.” TRD

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A housing recovery already? No way, say some economists. Moody’s economists say that the likelihood of a double-dip in the nationwide housing market is “uncomfortably high,” according to DSNews. The tracking firm is decidedly pessimistic about the nationwide housing market, and Celia Chen, a senior director with Moody’s, said that overall economic conditions spell bad news for a housing comeback. “We have downgraded the near-term housing outlook based on the lingering weakness in the demand for homes, the expectation that job creation will remain soft this year, and the slow speed at which the mortgage industry is working through distressed mortgages,” Chen said. [DSNews]

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