After years of flat rent growth and increasing vacancy rates, conditions in the apartment industry continue to recover, according to the National Multi Housing Council’s latest quarterly survey of apartment market conditions.


The survey’s indexes measure changes in occupancy rates, sales volume, availability of equity and debt market conditions between October 2004 and January 2005. For the second quarter in a row–and only the third time in the survey’s nearly six-year history–all four indexes showed improving conditions compared with three months earlier.


“The transactions market continues to sizzle as more and more investors look to acquire apartment properties,” noted NMHC Chief Economist Mark Obrinsky. “Powerful demographic trends make this a favored sector over the next five to 10 years, and the outlook is improving for the near term as well.”


Highlights of the survey included:


  • 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 above 50 means more respondents saw improving conditions than saw worsening conditions over the past three 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 sales volume.

  • The Equity Financing Index rose to 64, the tenth time in the past 11 quarters that the index has surpassed 50. While 56 percent of respondents indicated that conditions were unchanged, 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.

Washington, D.C.-based NMHC is a national association representing apartment firms in the U.S.




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