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U.S. Property Prices Emerging From Stagnant Winter According To Ten-X Commercial Real Estate Nowcast
The apartment sector shows the strongest increases as four of the five major CRE sectors feature gains after 2016's slow start

IRVINE, Calif. and SILICON VALLEY, Calif., May 26, 2016 /PRNewswire/ -- Ten-X, the nation's leading online real estate marketplace, has released its latest Ten-X Commercial Real Estate (CRE) Nowcast. The pricing index, which combines Google Trends data, Ten-X's proprietary transaction data and investor surveys to forecast CRE pricing trends in real time, reveals that commercial valuations increased by 0.3 percent month-over-month in May, a 5.8-percent increase from one year ago after a positive gain in April helped reverse a few soft months to open 2016.

Ten-X (PRNewsFoto/Ten-X)

"We are seeing signs of renewed vigor in commercial real estate pricing after a quiet winter period, now that the financial market volatility seen during the first few months of 2016 has dissipated," said Ten-X Chief Economist Peter Muoio. "Positive growth in the apartment sector helped fuel May's nowcast, where that sector's gains were the strongest — something that is also evident due to robust pricing seen on the Ten-X online sales platform."

May's apartment sector nowcast is up 0.7-percent from the previous month, the strongest across all five major CRE sectors. The apartment sector has averaged month-over-month gains of 1.7 percent over the past three months and is now up 7 percent year over year. Google search activity is softer, though, and apartment vacancies increased 10 bps in Q1, signaling the third consecutive 10 bp increase. Rent growth remains strong, though appears to be decelerating.

The only CRE segment decline in May was found in industrial, which fell 0.7 percent, reflected by both weaker pricing on the Ten-X platform and a drop-off in relevant Google search activity. Meanwhile, the other major sectors are improving.

After six consecutive declines, the hotel sector showed a May increase, signaling a more bullish view by survey respondents about hotel fundamentals and valuations. The Ten-X Hotel Nowcast still is slightly below its year-ago level, due to the earlier string of declines.

The Ten-X Retail Nowcast saw a 0.6-percent gain in May, marking the second strongest month-on-month increase among the property segments. Google search activity related to retail was flat for the month, though, and the sentiment gain could reflect a broader improvement in sentiment that included retail as capital markets have improved from their early year swoon. Overall, retail is up just 5.5 percent year over year. The office market, meanwhile, continues showing signs of soft, positive growth. The Ten-X Office Nowcast shows a month-to-month increase of 0.4 percent in May. Office is now up only 1.6 percent over the past year, reflecting the slow-motion recovery in office fundamentals.

May Nowcast Results: All price indexes are based at 100 from January 2011

Sector

Nowcast Index

Month-Over-Month %
Change

Year-Over-Year
% Change

Office

164.3

+0.4%

+1.6%

Apartment

192.9

+0.7%

+7.0%

Retail

171.5

+0.6%

+8.3%

Industrial

163.6

-0.7%

+14.6%

Hotel

196.8

+0.3%

-0.1%

All Property Types

177.8

+0.3%

+5.8%

About the Ten-X CRE Nowcast:

The Ten-X CRE Nowcast (formerly the Auction.com CRE Nowcast) is a price index covering the entire U.S. commercial market, including individual price trends for each major market sector– office, apartments, retail, industrial and hotels. It is based on data modeling developed by Google Chief Economist Hal Varian, who defines "nowcasting" as "contemporaneous forecasting" – the ability to predict what is happening as it occurs. Ten-X applies Varian's theories by combining publicly available and anonymous Google Trends data with its own proprietary transactional data to create a model for accurately predicting current commercial real estate activity. This data is supplemented with "real human" input through the company's partnership with Situs and their Real Estate Research Report (RERC). 

Ten-X issues its CRE Nowcast monthly after combining transactional data, related online search activity indicating purchase intent and investor survey results. The company runs multiple versions of the Nowcast model and layers in additional variables every day to improve its accuracy in predicting pricing trends across CRE sectors in key U.S. markets. Future iterations will include regional, local and individual asset-based price indicators. By analyzing current market conditions as opposed to only historical data, Ten-X is able to provide more relevant and timely insight to real estate investors, economists and government entities alike.

About Ten-X

Ten-X is the nation's leading online real estate marketplace and the parent to Ten-X Homes, Ten-X Commercial and Auction.com. To date, the company has sold 200,000+ residential and commercial properties totaling more than $37 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions entirely online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include Google Capital and Stone Point Capital. For more information, visit Ten-X.com.

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SOURCE Ten-X

For further information: The Hoyt Organization, Kent Barrett, kbarrett@hoytorg.com, Katherine Lambert, klambert@hoytorg.com, (310) 373-0103
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