WASHINGTON — Apartment markets are continuing to grow into the second quarter of 2014, according to the National Multifamily Housing Council’s (NMHC) quarterly survey, marking the second quarter in a row where all indexes are above the breakeven level of 50.
The NMHC’s Quarterly Survey of Apartment Market Conditions indicates that the market tightness index rose from 56 to 68 from the first quarter this year. The report says that this improvement is partially seasonal, but “the index is higher than the average for the July quarter since the survey began 15 years ago.”
The sales volume index increased from 52 to 54. About a third (29%) reported a higher sales volume since the last survey, and only 16% reported fewer sales.
Additionally, the equity financing index rose five points to 58. Of respondents, 56% report that equity financing availability hasn’t changed over the past three months. NMHC says that this is a similar finding to the past three quarterly surveys.
In regards to debt financing, the index increased to 68 from 63. Of the surveyed group, 30% believe that conditions have improved, and only 3% believe that conditions have worsened. This is an improvement from January’s quarterly survey, where 30% said they believed conditions were worse, according to NHMC.
“Despite concerns in some quarters about the pace of new development, most markets appear to be absorbing new supply with no downward pressure on rents or vacancies,” says Mark Obrinsky, NMHC senior vice president of research and chief economist. “The improvement in market tightness was particularly noteworthy. Four years into the apartment industry recovery and expansion, the increase in demand continues to outstrip the pickup in new supply.”
The NMHC survey also indicates that urban development is on the rise, with 43% of respondents reporting increased shares of urban development relative to suburban in the last six months, compared to 27% reporting an increased share of suburban development.
Of the suburban developments, 54% are town center-style developments, with 39% reporting no appreciable change, and 7% reporting more garden-style developments.
The full survey can be accessed on the NMHC website.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].