Apartment Market Conditions Improving, According To National Multi Housing Council Quarterly Survey

Apartment Market Conditions Improving, According To National Multi Housing
Council Quarterly Survey

Narrowing Bid-Ask Spread Indicates Increased Liquidity

WASHINGTON, Oct. 29 /PRNewswire-USNewswire/ -- The apartment market is showing
signs of improvement, according to the National Multi Housing Council's latest
Quarterly Survey of Apartment Market Conditions.

The survey showed increased sales activity and improvements in the
availability of debt and equity capital compared with three months ago. The
Sales Volume Index hit its highest level in four years, while the Equity and
Debt Financing Indexes were the highest in three years.

Only one index--the one measuring market tightness (vacancies and rent
levels)--remained below 50 (index numbers below 50 indicate worsening
conditions), but it also showed improvement over the prior quarter, rising
from 20 to 31.

"The broad improvements in sales volume and debt and equity financing suggest
the transactions market may finally be thawing," noted NMHC Chief Economist
Mark Obrinsky. "Nearly half (45 percent) of respondents indicated that the
gap between what sellers are asking for and what buyers are offering--the
bid-ask spread--has narrowed."

"But the economic headwinds remain strong," Obrinsky added, "as the employment
market continues to sag, demand for apartment residences continues to slip.
Though this quarter's Market Tightness Index is improved compared to last
quarter, it still indicates higher vacancies and lower rents."

Highlights of the Survey Results

-- The Market Tightness Index rose from 20 to 31. Nearly half (49
percent)
said markets were looser (with higher vacancies and lower rents),
while
11 percent said markets were tighter. This was the ninth straight
quarter in which the index remained below 50, but the fourth
consecutive
quarter in which the index measure has risen. For the year, the
Market
Tightness Index averaged 20, the lowest on record (since 1999).
-- The Sales Volume Index rose from 44 to 59, the highest level in four
years. While most respondents (62 percent) reported no change in
sales
volume, 28 percent said sales volume was higher--the highest share
reporting that in four years. This was the first quarter in four
years
in which this index read above 50. For the year, the Sales Volume
Index
measured 36, a substantial gain from the 2008 annual figure of 13.

-- The Equity Financing Index increased from 39 to 58, the highest in
three
years

as 25 percent of respondents said equity financing was more available. This
was the
first quarter since April 2007 in which this index read over 50. For the
year, the Equity Financing Index measured 35, also a substantial gain from
last year's figure of 13.
-- The Debt Financing Index increased again from 39 to 59, also the
highest
in three years with 28 percent indicating that this is a better time
to
borrow than three months earlier. This was also the first time in the
last 11 quarters that this index read over 50. For the year the debt
financing index measured 41, up significantly from 2008's 21.

Full survey results are posted at www.nmhc.org/goto/QuarterlySurvey09.

Note: The October 2009 Quarterly Survey of Apartment Market Conditions was
conducted October 19-26, 2009; 53 CEOs and other senior executives of
apartment-related firms nationwide who serve on NMHC's Board of Directors or
Advisory Committee responded. The July 2009 Quarterly Survey was conducted
July 20-29, 2009; 75 responded. The October 2008 Quarterly Survey was
conducted October 14-23, 2008; 70 responded.

Based in Washington, DC, NMHC is a national association representing the
interests of the larger and most prominent apartment firms in the U.S. NMHC's
members are the principal officers of firms engaged in all aspects of the
apartment industry, including owners, developers, managers and financiers.
One-third of Americans rent their housing, and over 14 percent live in a
rental apartment. For more information, contact NMHC at 202/974-2300, e-mail
the Council at info@nmhc.org, or visit NMHC's web site at www.nmhc.org.

SOURCE National Multi Housing Council

Michael Tucker of NMHC, +1-202-974-2360, mtucker@nmhc.org