NMHC Quarterly Survey of Apartment Conditions (April 2017)


National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(April 2017)
 


 


Market Tightness Index1


Sales Volume Index2


Equity Financing Index3


Debt Financing Index4


April 201741 304241
January 201725 253314
October 201628423338
July 2016

43504462

April 2016


43


53


45


50


January 2016


47


46


46


37


October 2015


53


53


52


54


July 2015


61


53


49


35


April 2015


58


52


55


60


January 2015


51


44


55


71


October 2014


52


58


54


71


July 2014


68


56


58


68


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



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 and 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/quarterlysurvey.


 


INDEX TRENDS


Quarterly Survey Line Graphs April 2017


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:


 


April 2017January 2017April 2016

Tighter than three months ago


20%8%18%

Looser than three months ago


38%58%32%

About unchanged from three months ago


41%34%51%

Don’t know or not applicable


1%0%0%



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


 


April 2017January 2017

April 2016


Higher than three months ago


11%5%

 26%


Lower than three months ago


50%55%

21%


About unchanged from three months ago


35%35%

 46%


Don’t know or not applicable


4%4%

 8%


    


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


 


April 2017

January 2017


April 2016


More available than three months ago


12%

6%


12%


Less available than three months ago


27%

40%


23%


About unchanged from three months ago


52%

 46%


 53%


Don’t know or not applicable


9%

 8%


 13%



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


 


April 2017

January 2017


April 2016


Now is a better time to borrow


16%

 1%


 19%


Now is a worse time to borrow


35%

 74%


 18%


About unchanged from three months ago


44%

 21%


53%


Don’t know or not applicable


5%

 5%


 10%




Question #5: Compared with three months ago, the number of tax credit buyers for new LIHTC transactions is:
  Excluding Don’t Know/Not Applicable
Significantly more0%0%
Somewhat more7%24%
About the same12%38%
Somewhat less4%14%
Significantly less7%24%
Don’t know or not applicable69%N/A

Question #6: Immediately after the Presidential election, pricing for new LIHTC transactions dropped by about 10-15 bps. Since then, pricing is:
  Excluding Don’t Know/Not Applicable
Significantly higher0%0%
Somewhat higher6%17%
About the same24%70%
Somewhat lower4%11%
Significantly lower1%2%
Don’t know or not applicable66%N/A



Note: The April 2017 Quarterly Survey of Apartment Market Conditions was conducted April 10-17, 2017; 140 CEOs and other senior executives of apartment-related firms nationwide responded.The January 2017 Quarterly Survey of Apartment Market Conditions was conducted January 10-17, 2017; 148 CEOs and other senior executives of apartment-related firms nationwide responded. The April 2016 Quarterly Survey of Apartment Market Conditions was conducted April 11-April 18, 2016; 120 CEOs and other senior executives of apartment-related firms nationwide responded.