NEW YORK CITY-Following more than a year of steady declines, the Moody’s/REAL All Property Type Aggregate Index announced Monday showed a 4.1% increase in commercial real estate prices for December 2009, marking two consecutive months of price gains. It was also the largest monthly increase in the history of the Commercial Property Price Indices prepared for Moody’s by Real Estate Analytics. However, the Moody’s/REAL report cautions that it’s too early to draw any long-term conclusions.

“Two months of positive returns and one month of higher transaction volume does not allow us to discern a trend just yet, particularly in light of the fact that year-end commercial real estate activity can distort the true condition of the markets,” according to the report. “We will need to see data from the first few months of 2010 to develop a clearer picture of where things stand.” Furthermore, the report notes that commercial prices are still off 40.8% from their peak.

The 716 repeat transactions recorded in December, totaling $9 billion, represented a 75% gain in count and a jump of more than 100% by dollar value from the prior month. While higher sales volume in and of itself can indicate that a market bottom may be approaching, the report points out that December often records a large upswing in volume, due to both buyers and sellers working to close deals by year’s end. “Last year was no exception, so we will have to wait for transaction volume data in coming months to determine if this represents a permanent turn in market activity,” according to the report.

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