WASHINGTON – Aug. 2, 2012 – 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) – and all measured 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.”
The July 2012 Quarterly Survey of Apartment Market Conditions reflects the views of 82 CEOs and other senior executives with apartment-related firms nationwide.
Financing is available but only for top markets. Only 16 percent of industry execs said acquisition capital was available in all markets at all times. Even fewer (10 percent) said construction capital was available across markets. Meanwhile, 65 percent said acquisition financing and 52 percent said construction financing were only available in top-tier markets.
Majority report increased market tightness. The Market Tightness Index edged up to 76 from 74. For the first time in a year, more than half (55 percent) of respondents said that markets were tighter. By contrast, only 2 percent reported the markets as loosening and 43 percent reported no change over the past three months.
The Sales Volume Index dipped slightly to 54 from 57. Nearly one quarter (24 percent) of respondents reported increased sales volume; 16 percent indicated decreased volume and 55 percent said conditions were unchanged since the last quarter.
Equity financing continues three years of growth. The Equity Financing Index shrank slightly to 58 from 62 but remained in positive territory – any index above 50. It was the twelfth straight quarter for an index is above 50.
Debt financing highest in two years. The Debt Financing Index jumped to 77 from 65, with only 2 percent of those surveyed saying borrowing conditions were worse than they were in the previous quarter. This reflects the sixth quarter in a row that the share of respondents who thought the availability and terms of debt financing had worsened was in the single digits.
© 2012 Florida Realtors®