Like the MIT/CRE Property Index, Standard & Poor’s also tracks commercial real estate (CRE) prices for various commercial property types.

Today’s results, including data gathered up to November 2007, further confirms the recent slowdown seen in the commercial real estate markets with the National composite index declining 1.36% since the peak set in August 2007.

Most components experienced weakness as compared to respective peaks set between July and August 2007 with the Office component showing a 5.24% peak decline, the Retail component showing a 2.01% peak decline, the Warehouse component showing a 1.57% peak decline and the Apartment component showing an increase of 2.44% as compared to November 2006.

There has been growing speculation and concern that the commercial real estate (CRE) markets will inevitably follow the lead of the residential markets down into a recessionary decline.

The notion of commercial real estate markets suffering a similar downturn as residential is both supported by historical correlations (e.g. residential and non-residential investment) as well as the anecdotally logical outcome for a market that has seen similar levels of loose over-lending.

Fortunately, we need not speculate about the current state of CRE as the MIT Center for Real
Estate tracks commercial property prices with a series of indexes that cover Apartment, Office,
Industrial and Retail property types.

There has been growing speculation that the commercial real estate (CRE) markets will inevitably follow the lead of the residential markets down to a recessionary correction.

Today, the U.S. Census Bureau released their April read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures while non-residential spending continued to grow essentially in-line with its recent expansion.

With the tremendous weakening trend continuing, total residential construction spending fell 21.01% as compared to April 2007 and 37.39% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 37.51% as compared to April 2007 and a truly grotesque 56.07% from the peak set in February 2006.

Today, the U.S. Census Bureau released their February read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures and giving a clear indication that a non-residential downturn is now well underway.

With the tremendous weakening trend continuing, total residential construction spending fell 18.83% as compared to February 2007 and 34.35% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 33.56% as compared to February 2007 and a truly grotesque 52.41% from the peak set in February 2006.

Last week, the U.S. Census Bureau released their December read of construction spending again demonstrated the significant extent to which private residential construction is contracting particularly for single family structures.

With the tremendous weakening trend continuing, total residential construction spending fell 20.44% as compared to December 2006 and 33.62% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 30.80% as compared to December 2006 and a truly grotesque 47.09% from the peak also set in February 2006.

I’ve decided to convert the “Constructing Capitulation” monthly wrapup post of all the economic bits and pieces I track into a recurring document with embedded images, data and narration.

I’ll continue to develop this document in coming months adding additional narration and data as well as perfecting the format and content.

Overview

Looking back at January’s results (released throughout February and into March) it now seems very possible that the nation’s housing markets, having just entered its third year of unprecedented nationwide contraction, are now poised to take another even more severe leg down with precipitously falling home prices, palpable recession, and significant inflation of food and fuel all working to depress sentiment and, in turn, stifle both general consumption and housing demand.

Today, the U.S. Census Bureau released their January read of construction spending again demonstrating the significant extent to which private residential construction is contracting particularly for single family structures.

With the tremendous weakening trend continuing, total residential construction spending fell 19.69% as compared to January 2007 and 34.52% from the peak set in February 2006.

Worse off though was private single family residential construction spending which declined 32.13% as compared to January 2007 and a truly grotesque 49.75% from the peak also set in February 2006.

Yesterday, the U.S. Census Bureau released their November read of construction spending again demonstrated the significant extent to which private residential construction is contracting particularly for single family structures.

With the tremendous weakening trend continuing, total residential construction spending fell 17.81% as compared to November 2006 and 30.33% from the peak set in February 2006.

Today’s results of the Conference Board’s Index of Leading Economic Indicators continues to predict troubled times ahead declining 0.1% from December’s level and 1.52% on a year-over-year basis compared to January 2007, a fourth straight monthly decline leaving the index at 135.8.

It’s important to note that a year-over-year decline greater than 1.5% has ONLY preceded EVERY recession that has occurred in the last 59 years so the back to back declines of 1.81% and 1.52% seem to suggest that overall the components of the index are indicating that recession is either here or very near.

Note that at the end of March, The Conference Board will release its annual benchmark revision to the index as some of the source data is updated.

Today, the Federal Reserve Bank of Philadelphia released the results of their Business Outlook Survey for March showing some moderation in the recent weakness seen in the regions manufacturing sector.

The survey of the Philadelphia regions manufacturing sector has been a pretty solid leading indicator of the overall strength or weakness and recession experienced by general economy.

As you can see by the following chart (click for larger version), during the past three post-recession expansion periods, the “current” diffusion index generally vacillated between 0 and 35 while the “future” index left the period of contraction at an elevated level and eventually joining the “current” index.

Given the recent flurry of interest in the outcome of the Federal Reserve Bank of Philadelphia’s Business Outlook Survey, I’m adding it to the lineup of regular economic indicator posts.

The survey of the Philadelphia regions manufacturing sector has been a pretty solid leading indicator of the overall strength or weakness and recession experienced by general economy.

As you can see by the following chart (click for larger version), during the past three post-recession expansion periods, the “current” diffusion index (more on diffusion indices later) generally vacillated between 0 and 35 while the “future” index left the period of contraction at an elevated level and eventually joining the “current” index.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

Today, the Federal Reserve Bank of Philadelphia released the results of their Business Outlook Survey for April showing renewed weakness to the regions manufacturing sector with the current activity index deteriorating to -24.9 from March’s -17.40, the fifth consecutive negative monthly result clearly indicating contraction is underway.

The survey of the Philadelphia regions manufacturing sector has been a pretty solid leading indicator of the overall strength or weakness and recession experienced by general economy.

The Mortgage Bankers Association (MBA) publishes the results of weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

Sources inside the Massachusetts Association of Realtors (MAR) report that tomorrows monthly existing home sales results will show that January single family home sales crashed 27.7% on a year-over-year basis while condo sales collapsed 33.7% over the same period.

Further, the single family median selling price declined 5.6% on a year-over-year basis to $321,000 while condo median prices increased 3.5% to $277,500.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that January 2008 is registering a home sales count well below even the 2007 level as well as indicating that the February’s results will be well below 2000 units, a significant decline.

As I had highlighted in a prior post, because of their strong correlation, the home price indices provided daily by Radar Logic can be effectively used as a preview of the more popular monthly S&P/Case-Shiller home price indices (released this Tuesday).

The current Radar Logic data reported on residential real estate transactions (condos, multi and single family homes) that settled as late as March 21 appears to indicate that price declines accelerated in many of the worst hit markets while markets that typically experience a seasonal lift this time a year are either trending lower or appear muted.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 8 basis points since last week to 5.90% while the purchase application volume decreased by 6.9% and the refinance application volume decreased 8.7% compared to last week’s results.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage increased 6 basis points since last week to 5.96% while the purchase application volume increased by 0.1% and the refinance application volume decreased 8.9% compared to last week’s results.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, 1 year ARMs as well as application volume for both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage jumped 21 basis points since last week to 6.17% while the purchase application volume declined by 5.4% and the refinance application volume slumped 25.7% compared to last week’s results.

Today’s results of the Conference Board’s Index of Leading Economic Indicators continues to predict troubled times ahead declining 0.4% from January’s revised level and 1.53% on a year-over-year basis compared to February 2007, a fifth straight monthly decline and sixth straight year-over-year decline leaving the index at 135.4.

It’s important to note that a year-over-year decline greater than 1.5% has ONLY preceded EVERY recession that has occurred in the last 59 years so the six significant consecutive year-over-year declines strongly suggests that overall the components of the index are indicating that recession is either here or very near.

Note that at the end of March, The Conference Board will release its annual benchmark revision to the index as some of the source data is updated.