After two years of decline, the commercial real estate market may finally be stabilizing. Prices are leveling off, transactions are rising, and properties are selling faster. Is this the turning point?
💰 Prices Stabilizing
In January 2025, commercial real estate prices dropped just 0.4%, a sharp slowdown from previous declines. While small-market deals continue to fall, major city transactions have stabilized and posted their first annual growth in 26 months. Since institutional investors dominate large deals, their confidence signals the market is bottoming out.
📊 Transaction Volume Rising
More properties are changing hands. January 2025 recorded 1,267 repeat sales, surpassing both 2024 and 2023 figures. Transactions even exceeded pre-pandemic levels, showing stronger-than-expected recovery. Total sales volume surged to $9.1 billion, marking a 34.6% increase from the previous year. Investors are stepping in with larger capital, reinforcing confidence in the market’s future.
⏳ Faster Sales, Smaller Price Gaps
Properties are selling faster, with average listing time dropping below six months, significantly shorter than the 9.5-month long-term average. The sale-to-list price ratio tightened to 93.1%, showing that while buyers still have leverage, sellers are adjusting expectations. Negotiation gaps are closing, making transactions more predictable.
🚫 Distressed Sales Declining
Fewer sellers are under pressure to offload properties at a loss. Distressed sales accounted for just 2.3% of transactions in January 2025, down from the previous year. As forced sales diminish, downward price pressure eases, supporting long-term stability.
✅ The worst may be over. Prices are stabilizing, transactions are accelerating, and distressed sales are shrinking. For buyers, this could be the last chance to secure properties at lower prices before the market rebounds.
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