by Calculated Risk on 4/22/2020 02:24:00 PM

The National Multifamily Housing Council (NMHC) released their April report: April Apartment Market Conditions Showed Weakness Amid COVID-19 Outbreak

Apartment market conditions weakened in the National Multifamily Housing Council’s (NMHC) Quarterly Survey of Apartment Market Conditions for April 2020, as the industry confronts the ongoing COVID-19 pandemic. The Market Tightness (12), Sales Volume (6), Equity Financing (13), and Debt Financing (20) indexes all came in well below the breakeven level (50).

“Residents across the country are currently under directives to stay at home and practice social distancing in order to contain the spread of COVID-19. As a result, much of the nation’s economic activity has been put on hold,” noted NMHC Chief Economist Mark Obrinsky. “With upwards of 20 million Americans now out of work, it is not surprising that 82 percent of respondents reported looser market conditions this quarter, and that just 5 percent observed a tighter market.”

“In the market for apartment sales, many respondents appear to have adopted the ‘wait-and-see’ attitude, noting that COVID-19 has created too much uncertainty around asset pricing for much of any transactions to occur. There are some buyers out looking for deals at the moment, but few sellers are willing to adjust prices downward. Only 1 percent of respondents reported higher sales volume, the lowest on record since 2008.”
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The Market Tightness Index decreased from 48 to 12, indicating looser market conditions. The vast majority (82 percent) of respondents reported looser market conditions than three months prior, compared to 5 percent who reported tighter conditions. A small portion (12 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 in April due to COVID.