Multifamily real estate markets tighten

Investment market pulls back from peak

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Apartment markets showed still further signs of tightening as the improvement in the supply-demand fundamentals continued, according to the National Multi Housing Council's (NMHC) April 2006 Quarterly Survey of Apartment Market Conditions. However, the pace of apartment property sales has eased off from last year's torrid pace. The Quarterly Survey found that the steady rise in interest rates led to a sharp decline in debt financing conditions, while the availability of equity capital was unchanged. "While investment activity continues at historically high levels, there has clearly been some pullback from the extraordinary levels of late 2005," said NMHC's Chief Economist Mark Obrinsky. "Higher interest rates are also reducing the advantage of leverage, which may lead to a shift in the profile of buyers of apartment properties over the near term. The big rate-driven advantage enjoyed by private buyers over institutional competitors appears to be diminishing." The Survey's four indexe...