NMHC Quarterly Survey of Apartment Conditions (January 2018)


National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(January 2018)



 


Market Tightness Index1


Sales Volume Index2


Equity Financing Index3


Debt Financing Index4


January 2018


36


40


58


38


October 2017


37


45


46


51


July 2017


43


47


46


47


April 2017


41


30


42


41


January 2017


25


25


33


14


October 2016


28


42


33


38


July 2016


43


50


44


62


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




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


QS-Jan-18-Graphs


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:


 


January 2018October 2017

January 2017


Tighter than three months ago


14%14%

19%


Looser than three months ago


42%40%

33%


About unchanged from three months ago


42%45%

48%


Don’t know or not applicable


2%1%

 0% 





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


 


January 2018

October 2017


January 2018


Higher than three months ago


19%

 19%


 27%


Lower than three months ago


38%

 28%


 33%


About unchanged from three months ago


38%

 47%


 37%


Don’t know or not applicable


5%

 5%


 3%    



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


 


January 2018

October 2017


January 2017


More available than three months ago


27%

9%


16%


Less available than three months ago


11%

17%


 24%


About unchanged from three months ago


51%

 62%


 55%


Don’t know or not applicable


12%

 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:


 


January 2018

October 2017


January 2017


Now is a better time to borrow


11%

 14%


 19%


Now is a worse time to borrow


36%

 12%


 25%


About unchanged from three months ago


45%

 62%


 53%


Don’t know or not applicable


8%

 12%


 3%



Question #5: Green financing saw a big increase in 2017. Will this continue in 2018?


 


 


Excluding Don’t Know/Not Applicable


Yes; the market has fully embraced green cost savings and volumes will continue to increase


 35%


 50%


Green financing will still be important this year, but production volume will be flat compared to 2017


22%


31%


Green financing will be more difficult to obtain in 2018 and production volume will decline


13%


19%


Don’t know/no opinion


 29%


 N/A



Note: The January 2018 Quarterly Survey of Apartment Market Conditions was conducted January 16-23, 2018; 144 CEOs and other senior executives of apartment-related firms nationwide responded. The October 2017 Quarterly Survey of Apartment Market Conditions was conducted October 10-October 17, 2017; 139 CEOs and other senior executives of apartment-related firms nationwide responded. The January 2017 Quarterly Survey of Apartment Market Conditions was conducted January 10-January 17, 2017; 148 CEOs and other senior executives of apartment-related firms nationwide responded.