The multifamily industry is seeing improved market conditions, according to the National Multifamily Housing Council’s quarterly survey of apartment market conditions for April.
“We are finally seeing improvement in most markets around the country,” noted NMHC chief economist Mark Obrinsky. “While gateway metros are still generally facing lower occupancy and rent levels compared to a year ago, conditions now appear to be on an upward trajectory. On the other hand, many Sun Belt markets continue to see substantial rent growth and strength in fundamentals.”
Findings from the survey, which was conducted April 5 to 12 and included 110 CEOs and other senior executives of apartment-related firms nationwide, include:
- The Market Tightness index increased from 43 to 81, indicating tighter market conditions for the first time since October 2019. Two-thirds, 67%, of respondents cited tighter market conditions than the prior quarter, compared with only 5% who reported looser conditions. Twenty-eight percent of respondents said conditions were no different.
- The Sales Volume index is at its highest level since October 2010, according to the NMHC, increasing from 53 to 77. More than half, 60%, of respondents reported higher sales volume than the prior three months, while 31% said volume had been unchanged; only 7% of respondents indicated lower sales volume from the previous quarter.
- The Equity Financing index rose from 58 to 68, with 42% of respondents reporting that equity financing was more available than in the previous quarter and 39% saying it was unchanged during the same period. Only 6% of respondents thought equity financing was less available.
- The only index below the break-even level of 50, Debt Financing fell from 49 to 44. Almost one-quarter, 23%, of respondents reported better conditions for debt financing compared with the previous quarter while 35% reported worse conditions. However, 34% of respondents reported unchanged conditions.
“Following what we saw as an inflection point last quarter, with a majority of respondents, 53%, indicating market conditions were unchanged, two-thirds, 67%, of respondents this quarter observed tighter conditions in their apartment markets,” said Obrinsky. “We move forward with cautious optimism, as vaccine rollout is well underway and there is hope that all residents will be able to return to work soon.”
Respondents also weighed in on if they have received rent relief money in the markets where they operate. Almost half, 47%, reported that they have been able to access federal rent relief funds in at least some areas of operation—5% in all areas and 42% in just some areas. Just over a quarter, 26%, of respondents, said they have not received any rent relief funds at this point. In addition, 16% said that while they have not received any federal relief funds, they have received other relief funds from local governments or charitable relief. The remainder, 11%, said they do not plan on accessing federal rent relief funds at all.
