"The problems now are more clearly defined and there's a grim sense of reality setting in, but that's a long way from saying markets are stabilizing or that conditions are on the mend," explains Roundtable President and CEO Jeffrey DeBoer in a prepared statement. Additional policy action is needed to restore credit availability and to address the equity shortage resulting from falling commercial property values, he says.

Property values are down today compared to a year ago, according to an overwhelming majority of the 100-plus respondents in the Q4 survey--but the percentage declined to 77% from 93% in the previous quarter. The status quo--or worse--will remain for some time; 71% of respondents said they expect values to remain "about the same" or to erode even further in the next 12 months.

Capital market conditions remain fragile, but there is now a greater mix of perspectives on the markets' trajectory, a view reflected in a separate survey released last week by NAIOP. On the debt side, 28% of those polled said credit availability is worse today than a year ago, compared to 71% who said so in the previous quarter. The percentage who characterized equity availability as worse today than one year ago also dropped significantly--from 55% in Q3 to 17% in the latest survey. Almost all participants in the current survey --95%--expect debt market conditions to be at least the same or better 12 months from now.

A third, also separate, report by Delta Associates also provides additional details about the real estate industry's health, or lack there of. The level of distressed debt nationally continues to rise, it reported last week, reaching $140.5 billion. This includes properties in distress, foreclosure, and lender REO, according to data from Real Capital Analytics-- an increase of 23%--$26.3 billion--since August, and 44%--$43.1 billion--since June.