Transaction volume in the overall market has fallen to its lowest level yet.
There were 282 transactions in May and of those, 52 were repeat-sales transactions used in calculating the Moody's/REAL index.
"The dollar value of sales was less than April 2009, the former lowest amount, with total sales dropping to $2.7 billion," according tot he report.
So what's the takeaway?
Distressed sales are almost certainly starting to exert downward pressure on the returns. In addition, mortgage interest rates have increased recently, which appears to have derailed or postponed some deal closings. The apartment sector felt the brunt of this effect, causing volume in this sector to decline more than for any other property type in the month of May.
REAL's president, Neal Elkin, says in the press release:
We cannot underestimate the enormity of what the data has represented in the past two months. The fact that this month's price decline is less than last month's price decline might be seen as a positive sign in some circles. It could suggest that bottom in prices may be starting to form, however, we need to see higher transaction dollar and deal volume in order to draw more definitive conclusions.
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