NMHC Quarterly Survey of Apartment Conditions (January 2017)

NMHC Quarterly Survey of Apartment Conditions (January 2017)

National Multifamily Housing Council
Quarterly Survey of Apartment Market Conditions
(January 2017)
  

Market Tightness Index1 Sales Volume Index2 Equity Financing Index3 Debt Financing Index4
January 2017 25 25 33 14
October 2016 28 42 33 38
July 2016 43 50 44 62
April 2016 43 53 45 50
January 2016 47 46 46 37
October 2015 53 53 52 54
July 2015 61 53 49 35
April 2015 58 52 55 60
January 2015 51 44 55 71
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

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 and 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.

For the complete historical series, please visit www.nmhc.org/quarterlysurvey.

 

INDEX TRENDS

 

January 2017 QS Graphs


SURVEY QUESTIONS
 

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:
January 2017 October 2016 January 2016
Tighter than three months ago 8% 6% 23%
Looser than three months ago 58% 49% 16%
About unchanged from three months ago 34% 45% 60%
Don’t know or not applicable 0% 0%  1%
Question #2: What about sales of apartment properties in the local markets you watch? The sales volume (number of deals) currently is:
January 2017 October 2016 January 2016
Higher than three months ago 5%  16%  22%
Lower than three months ago 55%  33%  30%
About unchanged from three months ago 35%  46%  43%
Don’t know or not applicable 4%  5%  6%
Question #3: What about equity financing for apartment acquisition or development? Considering both price and non-price terms, equity financing today is:
January 2017 October 2016 January 2016
More available than three months ago 6% 8% 9%
Less available than three months ago 40% 42%  17%
About unchanged from three months ago 46%  43%  64%
Don’t know or not applicable 8%  7%  10%
Question #4: What about the conditions for multifamily mortgage borrowing? Considering both interest rates and non-rate terms, compared to three months ago:
January 2017 October 2016 January 2016
Now is a better time to borrow 1%  9%  47%
Now is a worse time to borrow 74%  33%  22%
About unchanged from three months ago 21%  52%  27%
Don’t know or not applicable 5%  5%  4%
Note: The January 2017 Quarterly Survey of Apartment Market Conditions was conducted January 10-17, 2017; 148 CEOs and other senior executives of apartment-related firms nationwide responded. The October 2016 Quarterly Survey of Apartment Market Conditions was conducted October 10-July 17, 2016; 147 CEOs and other senior executives of apartment-related firms nationwide responded. The January 2016 Quarterly Survey of Apartment Market Conditions was conducted January 4-January 11, 2016; 147 CEOs and other senior executives of apartment-related firms nationwide responded.

 

Source: NMHC

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