Friday, October 23, 2020

NMHC: "October Apartment Market Conditions Showed Some Rebound from COVID-19 Impacts"

by Calculated Risk on 10/23/2020 11:30:00 AM

The National Multifamily Housing Council (NMHC) released their October report: October Apartment Market Conditions Showed Some Rebound from COVID-19 Impacts

Apartment market conditions moderated in the National Multifamily Housing Council’s Quarterly Survey of Apartment Market Conditions for October 2020, as the industry continues to cope with the ongoing Covid-19 pandemic. While the Sales Volume (72), Equity Financing (62) and Debt Financing (73) indexes all came in above the breakeven level (50), the index for Market Tightness (35) indicated continued weakness.

The ongoing Covid-19 pandemic continues to constrain economic activity, resulting in higher vacancies and lower rent growth for apartments overall,” noted NMHC Chief Economist Mark Obrinsky. “Still, industry professionals are observing more favorable conditions in many suburban markets. And, while this round marks the fourth consecutive quarter of deteriorating conditions, there was considerably more variation in responses compared to last quarter – less than half (49 percent) thought that market conditions were looser.”
The Market Tightness Index increased from 19 to 35, indicating looser market conditions. Nearly half (49 percent) of respondents reported looser market conditions than three months prior, compared to 18 percent who reported tighter conditions. One in three respondents (33 percent) felt that conditions were no different from last quarter.
Apartment Tightness Index
Click on graph for larger image.

This graph shows the quarterly Apartment Tightness Index. Any reading below 50 indicates looser conditions from the previous quarter. 

This indicates market conditions have been weak for four consecutive quarters, and especially weak in the first half of 2020.