National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(January 2012)
|
Market Tightness Index 1 |
Sales Volume |
Equity Financing |
Debt Financing |
Jan 2012 |
60 |
50 |
60 |
74 |
Oct 2011 |
52 |
54 |
54 |
70 |
Jul 2011 |
82 |
70 |
70 |
74 |
Apr 2011 |
90 |
65 |
76 |
69 |
Jan 2011 |
78 |
62 |
74 |
48 |
Oct 2010 |
77 |
84 |
70 |
82 |
Jul 2010 |
83 |
78 |
73 |
81 |
Apr 2010 |
81 |
72 |
71 |
58 |
Jan 2010 |
38 |
56 |
66 |
49 |
Oct 2009 |
31 |
59 |
58 |
59 |
Jul 2009 |
20 |
44 |
39 |
39 |
Apr 2009 |
16 |
30 |
29 |
41 |
Jan 2009 |
11 |
12 |
12 |
26 |
Oct 2008 |
24 |
5 |
4 |
4 |
Jul 2008 |
40 |
17 |
11 |
13 |
Apr 2008 |
44 |
13 |
13 |
22 |
Jan 2008 |
33 |
18 |
24 |
45 |
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.
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: |
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|
January 2012 |
October 2011 |
January 2011 |
Tighter than three months ago |
34% |
27% |
60% |
Looser than three months ago |
14% |
22% |
4% |
About unchanged from three months ago |
51% |
51% |
36% |
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: |
|||
|
January 2012 |
October 2011 |
January 2011 |
Higher than three months ago |
23% |
27% |
34% |
Lower than three months ago |
22% |
20% |
10% |
About unchanged from three months ago |
52% |
45% |
52% |
Don’t know or not applicable |
3% |
7% |
4% |
Question #3: What about equity financing for apartment acquisition or development? Considering both price and non-price terms, equity financing today is: |
|||
|
January 2012 |
October 2011 |
January 2011 |
More available than three months ago |
32% |
24% |
52% |
Less available than three months ago |
11% |
16% |
4% |
About unchanged from three months ago |
50% |
55% |
39% |
Don't know or not applicable |
6% |
5% |
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 2012 |
October 2011 |
January 2011 |
Now is a better time to borrow |
50% |
43% |
22% |
Now is a worse time to borrow |
2% |
3% |
26% |
Conditions are about unchanged |
43% |
49% |
50% |
Don't know or not applicable |
5% |
4% |
3% |
Question #5: As renter demand has rebounded after the recession, so has talk of new apartment development. Where does new development stand in the markets you’re familiar with? |
||
|
January 2012 |
October 2011 |
Lots of talk, but not much activity yet. |
22% |
29% |
Substantial pickup in land acquisition, lining up financing and permit activity, but new construction starts haven’t increased much. |
53% |
47% |
Developers have been breaking ground on new construction at a rapid clip. |
20% |
20% |
Don't know or not applicable. |
5% |
3% |
Question #6: In the markets you are familiar with, how would you rate the development pipeline in relationship to the current and expected future demand in those markets? |
||
|
January 2012 |
October 2011 |
New development is at or near the right level. |
43% |
43% |
New development has ramped up considerably but is still considerably below what is needed. |
34% |
31% |
New development hasn’t increased much from the post-financial crisis lows and is below demand. |
14% |
23% |
Don't know or not applicable. |
9% |
3% |
Note: The January 2012 Quarterly Survey of Apartment Market Conditions was conducted January 23 - January 30, 2012; 105 CEOs and other senior executives of apartment-related firms nationwide responded. The July 2011 Quarterly Survey of Apartment Market Conditions was conducted July 25-August 1, 2011; 91 CEOs and other senior executives of apartment-related firms nationwide responded. The January 2011 Quarterly Survey was conducted January 25-February 1, 2011; 111 responded.