NMHC Quarterly Survey of Apartment Market Conditions (July 2011)

 National Multifamily Housing COUNCIL
Quarterly Survey of Apartment Market Conditions
(July 2011)

   

Market Tightness
Index1

Sales Volume
Index2

Equity Financing
Index3

Debt Financing
Index4

Jul 2011

82

70

70

74

Apr 2011

90

65

76

69

Jan 2011

78

62

74

48

Oct 2010

77

84

70

82

Jul 2010

83

78

73

81

Apr 2010

81

72

71

58

Jan 2010

38

56

66

49

Oct 2009

31

59

58

59

Jul 2009

20

44

39

39

Apr 2009

16

30

29

41

Jan 2009

11

12

12

26

Oct 2008

24

5

4

4

Jul 2008

40

17

11

13

Apr 2008

44

13

13

22

Jan 2008

33

18

24

45

Oct 2007

46

12

22

17

Jul 2007

55

39

48

26

Apr 2007

56

38

53

54

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

   

   

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 today are:

 

July 2011

April 2011

July 2010

Tighter than three months ago

 67%

79%

69%

Looser than three months ago

 3%

0%

4%

About unchanged from three months ago

30%

21%

28%

Don’t know or not applicable

 0%

0%

0%

 

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

 

July 2011

April 2011

July 2010

Higher than three months ago

 46%

37%

61%

Lower than three months ago

 5%

8%

5%

About unchanged from three months ago

 46%

47%

34%

Don’t know or not applicable

 2%

8%

1%

 

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

 

July 2011

April 2011

July 2010

More available than three months ago

 42%

54%

48%

Less available than three months ago

 1%

1%

2%

About unchanged from three months ago

 49%

41%

47%

Don't know or not applicable

 8%

4%

4%

 

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

 

July 2011

April 2011

July 2010

Now is a better time to borrow

 53%

44%

64%

Now is a worse time to borrow

 5%

7%

3%

Conditions are about unchanged

 40%

48%

31%

Don't know or not applicable

 2%

1%

2%

Note: The July 2011 Quarterly Survey of Apartment Market Conditions was conducted July 25-August 1, 2011; 91 CEOs and other senior executives of apartment-related firms nationwide responded.   The April 2011 Quarterly Survey of Apartment Market Conditions was conducted April 25-May 2, 2011; 102 CEOs and other senior executives of apartment-related firms nationwide responded.  The July 2010 Quarterly Survey was conducted July 26-August 2, 2010; 109 responded.  

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