“The apartment markets are still firing on all cylinders,” said Mark Obrinsky, NMHC’s SVP of Research and Chief Economist. “Demand for apartment residences is still strong enough to offset the gradually rising level of new apartment deliveries. Even with occupancy rates at high levels, markets got just a bit tighter in the last three months."
The survey also asked about apartment demand from demographics beyond the core mid-to-late twenties set. One in five (22 percent) reported a significant increase in the number of Baby Boomers among their residents. A similar share (21 percent) indicated a significant increase in “forty-somethings” in their properties. A smaller share of respondents reported increases among single parents (13 percent) and married couples with children (4 percent).
“Young people still make up a disproportionate share of apartment renters. But now we’re starting to see growing segment of baby boomers attracted to apartment living,” said Obrinsky.
Key findings include:
The Market Tightness Index fell from 68 to 52. Slightly more than half (52 percent) of respondents reported unchanged conditions. Approximately one-quarter (26 percent) saw conditions as tighter than three months ago, a decrease from July’s survey, where half saw conditions as tighter than three months ago. Looser conditions were reported by 22 percent of respondents, a slight uptick from July’s 15 percent.
The Sales Volume Index rose two points to 58. Over half (56 percent) of respondents felt that sales volumes were unchanged from three months earlier, while a higher share of responses noted higher sales (27 percent) than lower sales (11 percent). The latter was the lowest level in more than three years.
The Equity Financing Index fell slightly from 58 to 54. The majority of respondents (54 percent) continue to report that the availability of equity financing is unchanged from three months ago-the fifth consecutive survey where a majority of respondents report unchanged conditions. Almost one-fifth of respondents (19 percent) believed that financing was more available than three months prior, higher than the amount of respondents (11 percent) that believed financing was less available.
The Debt Financing Index increased to 71 from 68. Almost half of respondents (45 percent) reported better conditions for debt financing, up from 37 percent in July. 41 percent believed that conditions are unchanged and only 2 percent felt that conditions were worse.
About the Survey:
The October 2014 Quarterly Survey of Apartment Market Conditions was conducted October 14-October 21, 2014; 133 CEOs and other senior executives of apartment-related firms nationwide responded.
