National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(July 2014)
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|
Market Tightness Index1 |
Sales Volume Index2 |
Equity Financing Index3 |
Debt Financing Index4 |
| 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 |
|
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
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SURVEY QUESTIONS
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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: |
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|
|
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: |
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|
|
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: |
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|
|
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: |
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|
|
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?
|
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|
|
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? |
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|
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.
