NMHC Quarterly Survey of Apartment Market Conditions (January 2013)

National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(January 2013)

 

Market Tightness
Index1

Sales Volume
Index2

Equity Financing
Index3

Debt Financing
Index4

Jan 2013

45

49

56

56

Oct 2012

56

51

56

65

Jul 2012

76

54

58

77

Apr 2012

74

57

62

65

Jan 2012

60

50

60

74

Oct 2011

52

54

54

70

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

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

 January 2013 Quarterly Survey Market Tightness  January 2013 Quarterly Survey Equity Financing

 

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:

 

January 2013

October 2012

January 2012

Tighter than three months ago

16%

25%

34%

Looser than three months ago

25%

14%

14%

About unchanged from three months ago

59%

62%

51%

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:

 

January 2013

October 2012

January 2012

Higher than three months ago

25%

24%

23%

Lower than three months ago

26%

21%

22%

About unchanged from three months ago

47%

49%

52%

Don’t know or not applicable

1%

6%

3%

 

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

 

January 2013

October 2012

January 2012

More available than three months ago

20%

26%

32%

Less available than three months ago

8%

14%

11%

About unchanged from three months ago

68%

56%

50%

Don't know or not applicable

5%

5%

6%

 

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

 

January 2013

October 2012

January 2012

Now is a better time to borrow

20%

39%

50%

Now is a worse time to borrow

6%

9%

2%

Conditions are about unchanged

71%

48%

43%

Don't know or not applicable

3%

5%

5%

 

Question #5: Anecdotal reports on the availability of capital have been mixed, both for acquisition and for development finance. Based on your recent experiences regarding acquisition finance, would you say:

 

All Respondents

Excluding “Don’t Know”

Capital is still constrained for all types of apartment properties in all markets.

5%

6%

Capital is widely available for top-tier apartments only, but is constrained for other properties.

20%

24%

Capital is widely available for all properties in primary markets, but still constrained for all properties in secondary and tertiary markets.

36%

43%

Capital is widely available for all types of apartment properties in all markets.

23%

28%

Don't know or not applicable.

16%

N/A

 

Question #6: Based on your recent experiences regarding construction finance, would you say:

 

All Respondents

Excluding “Don’t Know”

Capital is still constrained for all types of apartment properties in all markets.

3%

5%

Capital is widely available for top-tier apartments only, but is constrained for other properties.

28%

40%

Capital is widely available for all properties in primary markets but still constrained for all properties in secondary and tertiary markets.

30%

43%

Capital is widely available for all types of apartment properties in all markets.

8%

12%

Don't know or not applicable.

31%

N/A

Note: The January 2013 Quarterly Survey of Apartment Market Conditions was conducted January 7-January 14, 2013; 87 CEOs and other senior executives of apartment-related firms nationwide responded.   The October 2012 Quarterly Survey of Apartment Market Conditions was conducted October 15-October 22, 2012; 89 CEOs and other senior executives of apartment-related firms nationwide responded.  The January 2012 Quarterly Survey was conducted January 25-February 1, 2012; 111 responded.