Apartments Are Now Showing Signs Of Weakening

Probably not the best article to lead with post-election but one that is important nevertheless. The National Multi Housing Council’s (NMHC) latest Quarterly Survey of Apartment Market Conditions reported three of the four indexes it uses to measure the health of the industry were record lows. Not. Good. Whenever you set a record low of anything that's bad, and things are not good right now for the multi-family housing industry.

One quote from the report stands out to us however so very important and something that cannot be missed in all of this gloom and doom.

"Nine straight months of job losses have begun to cut into the demand for apartment residences," says Mark Obrinsky, NMHC’s vice president of research and chief economist. "While favorable demographics and a lower home ownership rate will benefit the apartment industry over time, owners and managers will first have to work their way through the current economic downturn before the benefits of that increased demand are likely to show up. Until then, economic worry will cause some people to double up by moving in with a friend or returning to their parents’ house.

We think Obrinsky has it completely right here. Working through an economic downturn can look like many things whether it be breaking even, minimizing losses, projecting losses, or projecting minimal gains if any. The key here is to be realistic and work through the tough times, not hope things get better, but physically work through these issues.

It will not be easy, as this index clearly outlines, but it can get better. We, as an industry, just have to keep doing the good work to stabilize our assets and re-build the foundation to make sure we are ok moving forward. Hope leads to hard work and hard work can lead to success. It just might be awhile before we get there.

Three Indexes Set Record Lows in NMHC Quarterly Survey that Shows Weakening of Apartment Market (multihousingnews.com)