Apartment Sector Sets Records in Market Tightness and Equity Availability: NMHC
Washington, D.C.--According to the National Multi Housing Council's latest Quarterly Survey of Apartment Market Conditions, the apartment industry continues to recover briskly.
Washington, D.C.–According to the National Multi Housing Council’s latest Quarterly Survey of Apartment Market Conditions, the apartment industry continues to recover briskly.
The Market Tightness Index, which examines vacancies and rents, rose to a record 90 from 78 last quarter. For all indexes, a reading above 50 indicates improving market conditions. Seventy-nine percent of respondents said markets were tighter (lower vacancies and/or higher rents), and for the first time ever, not a single respondent thought conditions were looser.
“The apartment industry rebounded strongly in 2010 as demand for apartment residences outpaced the sluggish recovery in the job market nationally,” says NMHC Chief Economist Mark Obrinsky. “These results show the apartment industry continues to do well even though the nation’s overall rate of economic growth has slowed.”
These strong fundamentals are bringing investors off the sidelines. The Equity Financing Index rose to another record high of 76 from last quarter’s record of 74. Debt capital was also more available in the last quarter, with an increase in the Debt Financing Index to 69 from 48 in January.
“Investors are well aware of the apartment recovery and are eager to deploy capital in the sector,” notes NMHC President Doug Bibby. “Sales volumes are still rising, which suggests that more investors are willing to pull the trigger at current cap rates.”