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soared past their prior peak pricing levels by 48.9% and 26.1%, respectively. Meanwhile, solid growth in the Northeast Office and Industrial Indices during the second quarter of 2016 propelled both above their prerecession peak levels, by 6.6% and 7.9%, respectively.
WEST REGION SURPASSED ITS PREVIOUS PEAK IN SECOND QUARTER. After advancing 1.3% in the second quarter of 2016 and 7.2% in the 12-month period ending in June 2016, CCRSI’s West Composite Index has now surpassed its peak in the last cycle by 0.6%. The West Multifamily Index has seen the strongest performance of the four property type indices within the region, growing 10% in the 12-month period ending in June 2016, the strongest growth rate for all 16 regional property type indices. Strong fundamentals in tech-driven markets, including San Francisco and San Jose, have supported such exceptional price growth within the West Multifamily Index.
PRICE GROWTH IN SOUTH REGION MIRRORS THE WEST. The South Composite Index increased 1.8% in the second quarter of 2016 and 7.3% in the 12-month period ending in June 2016. Similar to commercial property pricing trends in the West region, the South Multifamily Index led pricing growth in the South region, expanding 8.6% in the 12-month period ended in June 2016. Growth in the South Multifamily Index has been particularly strong, surpassing its prerecession peak by 7.9% in June 2016, the only property type index in the South region to do so. The South Multifamily Index also saw the steepest peak-to-trough decline (43.5%) of any property type in the region during the last downturn.
MIDWEST REGION PRICES REBOUND IN SECOND QUARTER. After falling 0.9% in the first quarter of 2016, the Midwest Composite Index bounced back in the second quarter of 2016, growing by 2.3% to post the strongest quarterly growth rate of the four major regions. Property prices in the Midwest region still lag other regions in the recovery, however. All four regional property indices remain below previous cyclical peak levels.
July 29, 2016
Source: CoStar Group, Inc.