Expansion Moderates for Apartment Markets in January


WASHINGTON, D.C. – January 29, 2013 – (RealEstateRama) — After a seven-quarter run, expansion moderated for apartment markets according to the National Multi Housing Council’s (NMHC) January Quarterly Survey of Apartment Market Conditions. For the first time since 2010, two of the four indexes – Market Tightness (45) and Sales Volume (49) – dipped below 50, though just barely. The two financing indexes show continued improvement for the 8th consecutive quarter, as the Equity Financing (56) and Debt Financing (57) Indexes remained above the breakeven level of 50.

“The pace of improvement in the apartment industry is moderating, but the expansion remains solid,” said Mark Obrinsky, NMHC’s Vice President for Research and Chief Economist. “Lease-up demand is seasonally weak in January, which would fully explain the small drop in the Market Tightness Index. Beyond that, markets were quite tight three months ago, and remain tight today. New construction has picked up considerably since its 2009 low, but is still playing catch-up with the increase in demand for apartment residences.”

Key findings include:

    • Financing remains constrained to top markets. Only 12 percent reported construction financing as available for all types of apartments in all markets. Similarly, slightly more than a quarter (28 percent) thought acquisition financing was available for all properties in all markets. For both construction and acquisition financing, 43 percent of respondents indicated that capital was available for primary markets but constrained in secondary and tertiary markets.


    • Market Tightness Index declined to 45 from 56. The change ends an 11-quarter run for the index at 50 or higher. Fifty-nine percent of respondents said that markets were unchanged, reflecting stable demand conditions. One quarter of respondents saw markets as looser, up from 14 percent in October, while 16 percent viewed markets as tighter.


    • The Sales Volume Index decreased slightly from 51 to 49. Nearly half (47 percent) of respondents said that markets were unchanged, reflecting stable demand conditions. One quarter of respondents saw markets as tighter, with nearly the same (26 percent) indicating looser markets.


    • The Equity Financing Index remained unchanged at 56. This reflects the 14th quarter in a row with the index above 50. Approximately two-thirds (68 percent) viewed equity financing as unchanged, while 20 percent of respondents thought equity financing was more available and only 8 percent indicated equity financing was less available.


  • Debt Financing Index declined from 65 to 57. Seven in ten (71 percent) reported conditions as unchanged, and only 6 percent believed that borrowing conditions for debt financing had worsened – the eighth consecutive quarter in the single digits.

Full survey data are available at www.nmhc.org/goto/61043.

About the survey: The January 2013 Quarterly Survey of Apartment Market Conditions was conducted January 7-14, with 87 CEOs and other senior executives of apartment-related firms nationwide responding.

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Based in Washington, D.C., NMHC is a national association representing the interests of the larger and most prominent apartment firms in the U.S. NMHC’s members are the principal officers of firms engaged in all aspects of the apartment industry, including owners, developers, managers and financiers. One-third of Americans rent their housing, and over 14 percent live in a rental apartment. For more information, contact NMHC at 202/974-2300, e-mail the Council at ">, or visit NMHC’s web site at www.nmhc.org.

Jim Lapides, 202/974-2360,

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