Property sales suffer

Bloomberg

Office, apartment, retail and industrial property transactions totaled $110 billion through the third quarter, Reis said in its capital markets survey. The annual rate of $147 billion is 69 percent less than the $467 billion of transactions in 2007, Reis said.

Property values also fell as the global credit crunch caused financing to become scarce and borrowing costs to rise. Office building prices declined 15.4 percent in the third quarter from their peak, and were down 1.8 percent from the second quarter, Reis said.

Apartments declined 17 percent from the high and fell 3.7 percent from the second quarter.

“The credit crisis has proven recalcitrant and has spilled over to the real economy,” Reis Chief Economist Sam Chandan said on a conference call yesterday. “The continued loss of momentum” means total real estate sales for this year will reach $142 billion, shy of the $147 billion if they had continued at the third quarter’s pace, and 70 percent below last year’s record.

Retail property prices dropped 7.3 percent from the peak and 0.8 percent from the second quarter. Industrial properties such as warehouses fell 10.6 percent from the high and 2 percent from the prior quarter, Reis said.