Apartment Industry Recovery Continues

Feb. 8, 2005
A NMHC quarterly survey shows improving conditions
The results of the Washington, D.C.-based National Multi Housing Council’s (NMHC) January 2005 Quarterly Survey of Apartment Conditions reveals that after years of flat rent growth and increasing vacancy rates, conditions in the apartment industry continue to recover. Among the indexes measured by the survey were occupancy rates, sales volume, availability of equity, and debt market conditions between October 2004 and January 2005. All four indexes showed improving conditions compared with 3 months earlier.“The transactions market continues to sizzle as more and more investors look to acquire apartment properties,” notes NMHC Chief Economist Mark Obrinsky. “Powerful demographic trends make this a favored sector over the next 5 to 10 years, and the outlook is improving for the near term as well.”Highlights of the survey from the NMHC website, include the following:The Market Tightness Index, which reflects changes in vacancy rates and rent increases, rose to 65, the sixth consecutive quarter of improving demand. (A score about 50 means more respondents saw improving conditions than saw worsening conditions over the past 3 months.)Apartment property sales continue to post record high levels, as reflected by a Sales Volume Index of 63 this quarter. This is the seventh consecutive quarter of increasing volume.The Equity Financing Index rose to 64, the 10th time in the past 11 quarters that the index has surpassed 50. While 56 percent of the respondents indicated that conditions were unchanged, over one-third (34 percent) noted that equity financing conditions had improved, and only five percent reported conditions had worsened.The Debt Financing Index was little changed at 56 (compared with 58 last October). Interest rates remain relatively low and debt financing is widely available.This information was provided by the National Multi Housing Council. Full survey results are posted at (http://www.nmhc.org/content/Servecontent.cfm?contentItemID=3338).

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