National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(April 2012)
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|
Market Tightness Index 1 |
Sales Volume |
Equity Financing |
Debt Financing |
|
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 |
|
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 |
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
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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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|
|
April 2012 |
January 2012 |
April 2011 |
|
Tighter than three months ago |
49% |
34% |
79% |
|
Looser than three months ago |
1% |
14% |
0% |
|
About unchanged from three months ago |
50% |
51% |
21% |
|
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: |
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|
|
April 2012 |
January 2012 |
April 2011 |
|
Higher than three months ago |
30% |
23% |
37% |
|
Lower than three months ago |
17% |
22% |
8% |
|
About unchanged from three months ago |
48% |
52% |
47% |
|
Don’t know or not applicable |
4% |
3% |
8% |
|
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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|
|
April 2012 |
January 2012 |
April 2011 |
|
More available than three months ago |
33% |
32% |
54% |
|
Less available than three months ago |
9% |
11% |
1% |
|
About unchanged from three months ago |
54% |
50% |
41% |
|
Don't know or not applicable |
4% |
6% |
4% |
|
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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|
|
April 2012 |
January 2012 |
April 2011 |
|
Now is a better time to borrow |
34% |
50% |
44% |
|
Now is a worse time to borrow |
4% |
2% |
7% |
|
Conditions are about unchanged |
55% |
43% |
48% |
|
Don't know or not applicable |
7% |
5% |
1% |
|
Question #5: Increasingly, media reports suggest that there is an abundance of capital available for multifamily firms. Anecdotal reports, however, suggest that this capital is targeted to top-tier properties in core markets. Based on your experiences would you say: |
|
|
|
April 2012 |
|
Capital is still constrained for all types of apartment properties in all markets. |
9% |
|
Capital is widely available in primary markets, but only for top-tier properties, and still constrained by other properties in primary, secondary and tertiary markets. |
34% |
|
Capital is widely available for all properties in primary markets, but still constrained for all properties in secondary and tertiary markets. |
36% |
|
Capital is widely available for all types of apartment properties in all markets. |
17% |
|
Don’t know or not applicable |
4% |
|
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? |
|
|
|
April 2012 |
|
New development remains considerably below the level needed. |
22% |
|
New development is at or near the right level. |
64% |
|
New development is higher than expected demand. |
10% |
|
Don't know or not applicable |
4% |
Note: The April 2012 Quarterly Survey of Apartment Market Conditions was conducted April 16-April 23, 2012; 91 CEOs and other senior executives of apartment-related firms nationwide responded. 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 April 2011 Quarterly Survey was conducted April 25 - May 2, 2011; 102 responded.
