National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(April 2016)
 

 

Market Tightness Index1

Sales Volume Index2

Equity Financing Index3

Debt Financing Index4

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

January 2013

45

49

56

57

October 2012

56

51

56

65

July 2012

76

54

58

77

April 2012

74

57

62

65

 

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


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 2016

January 2016

April 2015

Tighter than three months ago

18%

19%

31%

Looser than three months ago

32%

25%

15%

About unchanged from three months ago

 51%

 56%

55%

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:

 

April 2016

January 2016

April 2015

Higher than three months ago

 26%

 22%

 28%

Lower than three months ago

 21%

 30%

 24%

About unchanged from three months ago

 46%

 43%

 47%

Don’t know or not applicable

 8%

 6%

 1%

   

 

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

 

April 2016

January 2016

April 2015

More available than three months ago

12%

9%

25%

Less available than three months ago

23%

17%

 15%

About unchanged from three months ago

 53%

 64%

 50%

Don’t know or not applicable

 13%

 10%

 10%

 

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

 

April 2016

January 2016

April 2015

Now is a better time to borrow

 19%

 6%

 32%

Now is a worse time to borrow

 18%

 32%

 12%

About unchanged from three months ago

 53%

 52%

 48%

Don’t know or not applicable

 10%

 9%

 8%

 

Question #5: In the markets you are familiar with, is bank construction financing availability currently:

 

 

Excluding Don’t Know

Significantly lower than six months ago

18%

 26%

Slightly lower than six months ago

 29%

 40%

About the same as six months ago

 22%

 31%

Higher than six months ago

 2%

 2%

Not available

 1%

1%

Don’t know / not applicable

29%

N/A

Question #6: For construction loans for which you have gotten recent quotes, are terms:

 

 

Excluding Don’t Know

Significantly less favorable than six months ago

7%

 12%

Slightly less favorable than six months ago

 33%

 60%

Unchanged from six months ago

 11%

 20%

Slightly more favorable than six months ago

 3%

 6%

Significantly more favorable than six months ago

 1%

2%

Don’t know / not applicable

46%

N/A

Note: 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. The January 2016 Quarterly Survey of Apartment Market Conditions was conducted January 4-January 11, 2016; 147 CEOs and other senior executives of apartment-related firms nationwide responded. The April 2015 Quarterly Survey of Apartment Market Conditions was conducted April 6-April 13, 2015; 154 CEOs and other senior executives of apartment-related firms nationwide responded.