WASHINGTON — For the sixth quarter in a row, the apartment industry improved across all indexes in the National Multi Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions. The survey’s indexes measuring Market Tightness (76), Sales Volume (54), Equity Financing (58) and Debt Financing (77) all measured at 50 or higher, indicating growth from the previous quarter.
“The apartment sector’s strength continues unabated,” says NMHC Chief Economist Mark Obrinsky. “Even as new construction ramps up, higher demand for apartment residences still outstrips new supply with no letup in sight. Despite the need for new apartments, acquisition and construction finance remains constrained in all but the best properties in the top markets.”
Key findings include:
- Financing is available, but only for top markets. Only 16% reported acquisition capital being available in all markets at all times. Even fewer (10%) stated that construction capital was available across markets.
- For the first time in a year, more than half (55%) of respondents said that markets were tighter. By contrast, only 2% reported the markets as loosening and 43% reported no change over the past three months.
- Nearly one quarter (24%) of respondents reported increased sales volume, compared to 16% who indicated decreased volume and 55% who reported conditions as unchanged since the last quarter.
- Equity financing marked 12 straight quarters of positive activity (Equity Financing Index at or above 50).
- Debt financing was the highest it’s been in two years. Only 2% reported borrowing conditions as being worse from the previous quarter.