National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(January 2014)
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Market Tightness Index1 | Sales Volume Index2 | Equity Financing Index3 | Debt Financing Index4 |
| Jan 2014 | 41 | 41 | 50 | 42 |
| Oct 2013 | 46 | 46 | 39 | 41 |
| Jul 2013 | 55 | 46 | 49 | 20 |
| Apr 2013 | 54 | 55 | 56 | 59 |
| Jan 2013 | 45 | 49 | 56 | 57 |
| Oct 2012 | 56 | 51 | 56 | 65 |
| Jul 2012 | 76 | 54 | 58 | 77 |
| Apr 2012 | 74 | 57 | 62 | 65 |
| 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 |
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Jan 2010 |
38 | 56 | 66 | 49 |
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.
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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 today are: |
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January 2014 |
October 2013 | January 2013 |
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Tighter than three months ago |
13% | 13% | 16% |
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Looser than three months ago |
31% | 20% | 25% |
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About unchanged from three months ago |
56% | 67% | 59% |
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Don’t know or not applicable |
1% | 0% | 0% |
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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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January 2014 | October 2013 | January 2013 |
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Higher than three months ago |
14% | 24% | 25% |
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Lower than three months ago |
33% | 32% | 26% |
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About unchanged from three months ago |
50% | 44% | 47% |
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Don’t know or not applicable |
3% | 0% | 1% |
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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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January 2014 |
October 2013 | January 2013 |
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More available than three months ago |
18% | 5% | 20% |
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Less available than three months ago |
17% | 27% | 8% |
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About unchanged from three months ago |
58% | 60% | 68% |
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Don't know or not applicable |
8% | 8% | 5% |
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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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January 2014 |
October 2013 | January 2012 |
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Now is a better time to borrow |
14% | 22% | 20% |
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Now is a worse time to borrow |
30% | 41% | 6% |
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Conditions are about unchanged |
50% | 36% | 71% |
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Don't know or not applicable |
7% | 2% | 3% |
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Question #5: Regarding the financing of new development, would you say: |
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All Respondents |
Excluding “Don’t Know” |
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Equity and debt financing are both widely available |
28% | 40% |
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Equity financing is widely available, but debt financing is currently constrained |
6% | 8% |
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Debt financing is widely available, but equity financing is currently constrained |
27% | 39% |
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Debt and equity financing are now both currently constrained |
9% | 13% |
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Don’t know or not applicable |
30% | N/A |
Note: The January 2014 Quarterly Survey of Apartment Market Conditions was conducted January 6-January 13, 2014; 157 CEOs and other senior executives of apartment-related firms nationwide responded. The October 2013 Quarterly Survey of Apartment Market Conditions was conducted October 7-October 16, 2013; 64 CEOs and other senior executives of apartment-related firms nationwide responded. The January 2013 Quarterly Survey was conducted January 7-January 14, 2013; 87 CEOs responded.
