National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(July 2014)
 

 

Market Tightness Index1

Sales Volume Index2

Equity Financing Index3

Debt Financing Index4

July 20146856 5868

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

January 2013

45

49

56

57

October 2012

56

51

56

65

July 2012

76

54

58

77

April 2012

74

57

62

65

January 2012

60

50

60

74

October 2011

52

54

54

70

July 2011

82

70

70

74

April 2011

90

65

76

69

January 2011

78

62

74

48

October 2010

77

84

70

82

July 2010

83

78

73

81

     

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

April 2014 QS Graphs Combined

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 are:

 

July 2014

April 2014

July 2013

Tighter than three months ago

50%

32%

24%

Looser than three months ago

15%

20%

14%

About unchanged from three months ago

35%

47%

61%

Don’t know or not applicable

1%

1%

0%

   

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

 

July 2014

April 2014

July 2013

Higher than three months ago

29%

28%

18%

Lower than three months ago

16%

25%

27%

About unchanged from three months ago

51%

43%

53%

Don’t know or not applicable

4%

4%

3%

 

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

 

July 2014

April 2014

July 2013

More available than three months ago

26%

20%

30%

Less available than three months ago

9%

13%

20%

About unchanged from three months ago

56%

58%

45%

Don’t know or not applicable

8%

9%

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 2014

April 2014

July 2013

Now is a better time to borrow

37%

30%

21%

Now is a worse time to borrow

2%

3%

22%

About unchanged from three months ago

52%

59%

49%

Don’t know or not applicable

9%

8%

9%

 

Question #5: In the markets that you arefamiliar with, have you noticed a change in the urban/suburban mix of newdevelopment projects within the last six months?

 

All Respondents

Excluding “Don’t Know”

 

The urban share of new development has increased relative to the suburban share compared with six months ago

 

39%

43%

 

The suburban share of new development has increased relative to the urban share compared with six months ago

 

25%

27%

The urban/suburban mix has stayed the same as six months ago

28%

30%

Don’t know or not applicable

8%

N/A

Question #6: Of the suburban developmentsyou are familiar with, has there been a change in the type of development overthe last six months?

All Respondents

Excluding “Don’t Know”

There are more traditional garden-style developments

6%

7%

There are more town center-style (“urban suburban”) developments

48%

54%

There has been no appreciable change in the type of development

35%

39%

Don’t know or not applicable

10%

N/A

 

Note: The July 2014 Quarterly Survey of Apartment Market Conditions was conducted July 14-July 21, 2014; 110 CEOs and other senior executives of apartment-related firms nationwide responded. The April 2014 Quarterly Survey of Apartment Market Conditions was conducted April 14-April 121, 2014; 133 CEOs and other senior executives of apartment-related firms nationwide responded. The July 2013 Quarterly Survey was conducted July 8-July 15, 2013; 70 CEOs and other senior executives responded.