Apartment Markets Decline Slightly In July Quarterly Survey

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The Editors's picture
apartment markets continue decline in second quarter

Apartment markets declined as softening conditions continue in the apartment markets for the second quarter in the National Multifamily Housing Council’s (NMHC) survey, according to a release.

All four indexes of the NMHC July Quarterly Survey of Apartment Market Conditions remained slightly below the breakeven level of 50, the fourth consecutive quarter indicating softening conditions.

  • Market Tightness (43)
  • Sales Volume (47)
  • Equity Financing (46)
  • Debt Financing (47)

All indexes all improved from April, but still hovered just below 50, according to the release.

“All four indexes are below 50 but rising, suggesting that the softening is less wide-spread than in previous quarters,” Mark Obrinsky, NMHC’s SVP of Research and Chief Economist, said in the release.

 “Despite some softness at the high end of the apartment market—due to construction having finally ramped up to the level needed—demand for apartments will continue to be substantial for years to come,” he said.

The market tightness Index edged up from 41 to 43, as almost half of respondents (48 percent) reported unchanged conditions. One-third (33 percent) of respondents saw conditions as looser than three months ago, while the remaining 19 percent reported tighter conditions.

Apartment markets continue decline

Apartment markets decline in second quarter

This marks the seventh consecutive quarter of overall declining conditions.

  • The sales volume index increased from 30 to 47, just shy of the breakeven level of 50. Twenty-seven percent of respondents reported higher sales volume than three months prior, compared to 33 percent that reported lower volume.
  • The equity financing index increased four points to 46, with almost a quarter (24 percent) of respondents believing that equity financing was less available than three months prior. Sixteen percent thought that equity financing was more available compared to three months ago.
  • The debt financing index increased from 41 to 47, showing a similar trend to the equity market. While a quarter of respondents (25 percent) reported worse conditions for debt financing compared to three months prior, another 19 percent disagreed, believing conditions had become more favorable.

About the Survey:

The July 2017 Quarterly Survey of Apartment Market Conditions was conducted July 10-July 17, 2017; 123 CEOs and other senior executives of apartment-related firms nationwide responded.

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