WASHINGTON, D.C. — For the third quarter in a row, apartment markets expanded across all four areas of the National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. Market tightness (52), sales volume (58), equity financing (54) and debt financing (71) indexes all remained above 50 – indicating growth from the previous quarter.
“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.
https://www.nmhc.org/Quarterly-Survey-October-2014/
National Multifamily Housing Council Quarterly Survey of Apartment Market Conditions (October 2014)
| Market Tightness Index1 | Sales Volume Index2 | Equity Financing Index3 | Debt Financing Index4 | |
| October 2014 | 52 | 58 | 54 | 71 |
| 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 |
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.