NMHC Quarterly Survey Finds Apartments in Fine Fettle

Washington, D.C.–The latest Quarterly Survey of Apartment Market Conditions by the National Multi Housing Council (NMHC) confirms the general sense of strength in the apartment market. “Demand for apartment residences continues to rise, even as the overall economy remains hampered by the aftermath of the housing bubble,” said NMHC chief economist Mark Obrinsky in a statement accompanying the release of the report.

All four survey measures by the NMHC of apartment market health in the second quarter of 2011 are quite strong. That is, markets are tighter, debt and equity capital are more available, and sales volume is rising. In fact, all four indexes were at or above 70—50 or above being the indication of improving conditions. Such sunny conditions have been fairly uncommon since the survey began in 1999, since this is only the fourth time ever that all the indexes have been above 70, and three of those instances have been since July 2010.

More specifically, the NMHC’s Market Tightness Index, which examines vacancies and rents, came in at 82, down from a record 90. This is the sixth straight quarter the index has topped 50. Though down slightly from last quarter’s record level, two-thirds of respondents noted tighter markets—meaning lower vacancies or higher rents or both—compared with three months earlier.

The availability of debt financing for acquisitions continues to broaden, with the Debt Financing Index rising to 74 from 69. More than half of respondents (53 percent) said that borrowing conditions had improved compared with three months ago, while another 40 percent said conditions were unchanged.

The Sales Volume Index increased further to 70 from 65. Forty-six percent of respondents said sales volume was higher this quarter; another 46 percent saw sales volumes unchanged. This was the eighth consecutive quarter the index has been above 50.

The Equity Financing Index came in at 70, a slight drop from last quarter’s record-setting 76.  Forty-two percent of respondents thought that equity financing conditions were better than three months ago. A minuscule 1 percent regarded equity as less available.