Shocking absolutely no one, the National Multifamily Housing Council (NMHC)'s recently-released Quarterly Survey of Apartment Market Conditions for April 2020 shows unit sales and other indicators slumping as the residential real estate industry has confronted the ongoing COVID-19 pandemic. The survey looked at market tightness, sales volume, equity financing, and debt financing indexes, finding that all came in well below the break-even level.
Stay-at-home orders and social distancing directives from public health and government officials to stem the tide of coronavirus infection have residents doing exactly that, said NMHC Chief Economist Mark Obrinsky. “As a result, much of the nation’s economic activity has been put on hold. 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,” Obrinsky continues, 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.”
In terms of numbers, the survey found that:
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.