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 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

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 2017 January 2017 April 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 2017 January 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 more 0% 0%
Somewhat more 7% 24%
About the same 12% 38%
Somewhat less 4% 14%
Significantly less 7% 24%
Don’t know or not applicable 69% 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 higher 0% 0%
Somewhat higher 6% 17%
About the same 24% 70%
Somewhat lower 4% 11%
Significantly lower 1% 2%
Don’t know or not applicable 66% 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.