NMHC Quarterly Survey (January 2005)

NMHC Quarterly Survey of Apartment Market Conditions:
Market Indexes
January 2005

	Market Tightness Index¹	Sales Volume Index²	Equity Financing Index³	Debt Financing Index⁴
Jan. 2005	65	63	64	56
Oct. 2004	60	65	59	58
Jul. 2004	72	54	54	36
Apr. 2004	59	52	67	47
Jan. 2004	52	52	61	64
Oct. 2003	54	57	54	43
Jul. 2003	45	51	49	66
Apr. 2003	32	48	51	55
Jan. 2003	29	41	52	59
Oct. 2002	35	58	62	80
Jul. 2002	39	51	65	76
Apr. 2002	35	40	48	31
Jan. 2002	4	20	36	36
Oct. 2001	9	19	33	81
Jul. 2001	22	41	48	65
Apr. 2001	30	43	45	77
Jan. 2001	47	49	54	90
Oct. 2000	50	47	43	60
Jul. 2000	57	31	45	51
Apr. 2000	60	37	49	38
Jan. 2000	43	24	39	6
Oct. 1999	49	39	39	17
Jul. 1999	55	44	50	32

The reported index numbers are based on data compiled from quarterly surveys of NMHC members. Survey responses reflect the change, if any, from the previous quarter. The indexes are standard diffusion indexes, so that they have leading indicator properties and are convenient summary measures showing the prevailing direction and scope of changes. They are calculated by taking one-half the difference between positive (tighter markets, higher sales volume, equity financing more available, a better time to borrow) and negative (looser markets, lower sales volume, equity financing less available, a worse time to borrow) responses and adding 50. This produces a series bounded by 0 (if all respondents answered in the negative) and 100 (if all respondents answered in the positive).

¹A Market Tightness Index reading above 50 indicates that, on balance, apartment markets around the country are getting tighter; a reading below 50 that market conditions are getting looser; and a reading of 50 indicates market conditions are unchanged.

²A Sales Volume Index reading above 50 indicates that, on balance, sales volume around the country is increasing; a reading below 50 that sales volume is decreasing; and a reading of 50 indicates market conditions are unchanged.

³An Equity Financing Index reading above 50 indicates that, on balance, equity finance is more available; a reading below 50 that equity finance is less available; and a reading of 50 indicates equity finance availability is unchanged.

⁴A Debt Financing Index reading above 50 indicates that, on balance, borrowing conditions are improving; a reading below 50 that borrowing conditions are worsening; and a reading of 50 indicates borrowing conditions are unchanged.

NATIONAL MULTI HOUSING COUNCIL
Quarterly Survey of Apartment Market Conditions (January 2005)
INDEX TRENDS

NMHC Quarterly Survey of Apartment Market Conditions
(January 2005)

Question #1: How are apartment market conditions in the local markets that you watch? "Tight" markets are defined as those with low vacancies and high rent increases. Conditions obviously vary greatly from place to place, but on balance, apartment market conditions in your markets today are:
	Jan. 2005	Oct. 2004	Jan. 2004
Tighter than three months ago	42%	36%	21%
Looser than three months ago	12%	16%	16%
About unchanged from three months ago	46%	48%	63%
Don't know or not applicable	0%	0%	0%

Question #2: What about sales of apartment properties in the local markets you watch? Compared to three months ago, the sales volume (number of deals) currently is:
	Jan. 2005	Oct. 2004	Jan. 2004
Higher than three months ago	36%	38%	21%
Lower than three months ago	11%	8%	16%
About unchanged from three months ago	50%	45%	58%
Don't know or not applicable	4%	9%	5%

Question #3: What about equity financing for apartment acquisition or development? Considering both price and non-price terms, compared to three months ago, equity financing today is:
	Jan. 2005	Oct. 2004	Jan. 2004
More available than three months ago	34%	19%	26%
Less available than three months ago	5%	1%	3%
About unchanged from three months ago	56%	66%	63%
Don't know or not applicable	8%	13%	8%

Question #4: What are the conditions for multifamily mortgage borrowing? Considering both interest rates and non-rate terms, compared to three months ago:
	Jan. 2005	Oct. 2004	Jan. 2004
Now is a better time to borrow	22%	25%	31%
Now is a worse time to borrow	11%	8%	3%
Conditions are about unchanged	62%	56%	60%
Don't know or not applicable	5%	11%	6%

Note: The January 2005 quarterly survey was conducted January 24-31, 2005. One hundred thirteen CEOs and other senior executives of apartment-related firms nationwide who serve on NMHC’s Board of Directors or Advisory Committee responded. The October 2004 quarterly survey was conducted October 11-18, 2004; 89 responded. The January 2004 quarterly survey was conducted January 19-26, 2004; 62 responded.

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