Prices flat as a pancake, and heading to 1990s Japan?

Moody's is reporting that CRE sales prices were essentially flat in August, with transaction levels at their lowest in four years. Why?

Neal Elkin, president of REAL, said that the flattening of prices in August may seem surprising, but that is because they are being looked at through the prism of the tremendous market turmoil of September and October. Transaction levels are still being hindered by a large bid-ask spread between buyers and sellers, he said, but many owners of commercial properties who purchased their properties with high leverage may have to sell, or refinance, although he said “that will be a slow process.”

Although Elkin said REAL is not in the prediction business, he said he would be surprised if prices did not show some decline in September.

So would most of us.

And on another front, we have the Fed trying to intervene in the markets with credit again. The government is already doing its part with its "Who cares about loans, let's give banks money to buy each other out" plan (Main Street ought to love this), and now the word is there will be another 50 bp rate cut. We're heading to zero, gang. That didn't work in Japan. Does that mean we are in for a decade of turmoil? No. But the damage is done (a 2.2% decline in the last quarter?) and we have to pay the price for a while. And I'll be the first to tell you: I knew things would eventually have to slow down but not like this. Yes, I was wrong. That doesn't mean you can't get a deal done; you can. But be prepared to work it.

Finally, how long will things be slow? Some say twelve quarters.