NMHC Quarterly Survey of Apartment Conditions (July 2013)

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

 

Market Tightness Index1 Sales Volume Index2 Equity Financing Index3 Debt Financing
Index4
Jul 2013 55 46 49 20
Apr 2013 54 55 56 59
Jan 2013 45 49 56 57
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

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.

For the complete historical series, please visit www.nmhc.org/goto/quarterlysurvey.

Market Tightness August 2013 Equity Financing August 2013

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 2013 April 2013 July 2012

Tighter than three months ago

24% 25% 55%

Looser than three months ago

14% 17% 2%

About unchanged from three months ago

61% 59% 43%

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 2013 April 2013 July 2012

Higher than three months ago

18% 30% 24%

Lower than three months ago

27% 20% 16%

About unchanged from three months ago

53% 45% 55%

Don’t know or not applicable

3% 5% 5%

 

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

 

July 2013 April 2013 July 2012

More available than three months ago

21% 20% 25%

Less available than three months ago

22% 7% 9%

About unchanged from three months ago

49% 61% 62%

Don't know or not applicable

9% 12% 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 2013 April 2013 July 2012

Now is a better time to borrow

8% 25% 57%

Now is a worse time to borrow

67% 6% 2%

Conditions are about unchanged

21% 65% 38%

Don't know or not applicable

5% 5% 2%

 

Question #5: Anecdotal reports suggest construction costs have changed substantially over the last year or so. Based on your recent experiences regarding construction costs, would you say:

 

All
Respondents
Excluding “Don’t Know”

Construction costs are much higher (>5%) than they were this time last year

57% 68%

Construction costs are higher(<5%) than they were this time last year

24% 29%

Construction costs are about the same as they were this time last year

1% 2%

Construction costs are a little lower (<5%) than they were this time last year

1% 2%

Construction costs are much lower (>5%) than they were this time last year

0% 0%

Don’t know or not applicable

16% N/A

Note: The July 2013 Quarterly Survey of Apartment Market Conditions was conducted July 8-July 15, 2013; 70 CEOs and other senior executives of apartment-related firms nationwide responded. The April 2013 Quarterly Survey of Apartment Market Conditions was conducted April 8-April 15, 2013; 85 CEOs and other senior executives of apartment-related firms nationwide responded.  The July 2012 Quarterly Survey was conducted July 16-July 24, 2012; 82 responded.