by Calculated Risk on 2/03/2020 04:35:00 PM

The National Multifamily Housing Council (NMHC) released their January report: January Quarterly Survey Indicates Apartment Conditions Mixed

Certain market conditions are loosening, according to the NMHC Quarterly Survey of Apartment Market Conditions, conducted in January 2020. The Sales Volume Index slipped further below the breakeven level (50) to 43, indicating a continued softness in property sales. “This reflects some seasonal decline along with the paucity of available deals, some respondents also noted the negative impact of the new rent laws in New York,” said NMHC Chief Economist Mark Obrinsky.

Additionally, Market Tightness (48) slipped below the breakeven level (50). “Apartment markets showed some softening in line with the slower leasing in the winter months,” noted Obrinsky. “Even so, the Market Tightness Index reading of 48 was the highest January reading in five years, and slightly higher than the January average of 45 in the survey’s 21-year history.”
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The Market Tightness Index decreased from 54 to 48, indicating the first sign of looser market conditions since January 2019. Nearly one-quarter (23 percent) of respondents reported looser market conditions than three months prior, compared to 18 percent who reported tighter conditions. Over half (59 percent) of respondents felt that conditions were no different from last quarter.

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 were looser over the last quarter, but this may be due to seasonal factors.

This followed three consecutive quarters with tighter conditions.