The piece below from the News, Trends and People section of Apartment Finance Today explains that the apartment market is still stable today, despite limitations on availability of financing. So far, it
states, there does not seem to be a significant impact on apartment rentals in most areas from the
inventory of houses and condos that have come into the rental market.
APARTMENT FINANCE TODAY – JULY/AUGUST 2008
The apartment market is showing signs of stability, although financing has become more difficult to
secure, according to the National Multi Housing Council’s (NMHC) latest Quarterly Survey of Apartment
Market Conditions. Demand for apartments remains strong, with more than 80 percent of survey respondents reporting a decrease in the number of renters leaving to become homeowners.
Mark Obrinsky, NMHC’s chief economist, noted that “even though there has been an increase in the number of condo and single-family rentals, these properties do not typically compete for the same renters as professionally managed apartments.� He went on to explain that “professionally managed properties may become even more desirable in the current market as renters of many of these individually owned condos and houses find themselves without housing because the owners of these properties have lost the property to foreclosure.�
The housing market downturn and financial market disruption are affecting multifamily financing, and
thus the volume of apartment property sales. Two-thirds of respondents noted that borrowing conditions had worsened compared with three months earlier, a reflection of the continued widening of spreads and tightening of credit standards. A record 76 percent of respondents reported that equity financing was less available. As a result, the Sales Volume Index declined to 13 this quarter, the second lowest reading in the NMHC Quarterly Survey’s history. Full survey results are posted at www.nmhc.org/goto/QuarterlySurvey08
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