NMHC Quarterly Survey of Apartment Conditions (July 2014)


National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(July 2014)
 


 


Market Tightness Index1


Sales Volume Index2


Equity Financing Index3


Debt Financing Index4


July 20146856 5868

April 2014


56


52


53


63


January 2014


41


41


50


42


October 2013


46


46


39


41


July 2013


55


46


49


20


April 2013


54


55


56


59


January 2013


45


49


56


57


October 2012


56


51


56


65


July 2012


76


54


58


77


April 2012


74


57


62


65


January 2012


60


50


60


74


October 2011


52


54


54


70


July 2011


82


70


70


74


April 2011


90


65


76


69


January 2011


78


62


74


48


October 2010


77


84


70


82


July 2010


83


78


73


81


     

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, hence 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).


1 A Market Tightness Index reading above 50 indicates that, on balance, apartment markets around the country are getting tighter; a reading below 50 indicates that market conditions are getting looser; and a reading of 50 indicates that market conditions are unchanged. 
2 A Sales Volume Index reading above 50 indicates that, on balance, sales volume around the country is increasing; a reading below 50 indicates that sales volume is decreasing; and a reading of 50 indicates that market conditions are unchanged. 
3 An Equity Financing Index reading above 50 indicates that, on balance, equity finance is more available; a reading below 50 indicates that equity finance is less available; and a reading of 50 indicates that equity finance availability is unchanged. 
4 A Debt Financing Index reading above 50 indicates that, on balance, borrowing conditions are improving; below 50 indicates that borrowing conditions are worsening; a reading of 50 indicates borrowing conditions are unchanged.


INDEX TRENDS


April 2014 QS Graphs Combined

SURVEY QUESTIONS  


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 are:


 


July 2014


April 2014


July 2013


Tighter than three months ago


50%


32%


24%


Looser than three months ago


15%


20%


14%


About unchanged from three months ago


35%


47%


61%


Don’t know or not applicable


1%


1%


0%


   


Question #2: What about sales of apartment properties in the local markets you watch? The sales volume (number of deals) currently is:


 


July 2014


April 2014


July 2013


Higher than three months ago


29%


28%


18%


Lower than three months ago


16%


25%


27%


About unchanged from three months ago


51%


43%


53%


Don’t know or not applicable


4%


4%


3%


 


Question #3: What about equity financing for apartment acquisition or development? Considering both price and non-price terms, equity financing today is:


 


July 2014


April 2014


July 2013


More available than three months ago


26%


20%


30%


Less available than three months ago


9%


13%


20%


About unchanged from three months ago


56%


58%


45%


Don’t know or not applicable


8%


9%


5%


 


Question #4: What about the conditions for multifamily mortgage borrowing? Considering both interest rates and non-rate terms, compared to three months ago:


 


July 2014


April 2014


July 2013


Now is a better time to borrow


37%


30%


21%


Now is a worse time to borrow


2%


3%


22%


About unchanged from three months ago


52%


59%


49%


Don’t know or not applicable


9%


8%


9%


 


Question #5: In the markets that you arefamiliar with, have you noticed a change in the urban/suburban mix of newdevelopment projects within the last six months?



 


All Respondents


Excluding “Don’t Know”


 


The urban share of new development has increased relative to the suburban share compared with six months ago


 


39%


43%


 


The suburban share of new development has increased relative to the urban share compared with six months ago


 


25%


27%


The urban/suburban mix has stayed the same as six months ago


28%


30%


Don’t know or not applicable


8%


N/A


Question #6: Of the suburban developmentsyou are familiar with, has there been a change in the type of development overthe last six months?



All Respondents


Excluding “Don’t Know”


There are more traditional garden-style developments


6%


7%


There are more town center-style (“urban suburban”) developments


48%


54%


There has been no appreciable change in the type of development


35%


39%


Don’t know or not applicable


10%


N/A


 


Note: The July 2014 Quarterly Survey of Apartment Market Conditions was conducted July 14-July 21, 2014; 110 CEOs and other senior executives of apartment-related firms nationwide responded. The April 2014 Quarterly Survey of Apartment Market Conditions was conducted April 14-April 121, 2014; 133 CEOs and other senior executives of apartment-related firms nationwide responded. The July 2013 Quarterly Survey was conducted July 8-July 15, 2013; 70 CEOs and other senior executives responded.