It hasn’t taken long for the COVID-19 pandemic to impact landlords, according to the latest research from the National Multifamily Housing Council.
The housing council’s latest survey of 241 chief executive officers and other senior executives of apartment-related firms, found that the multifamily market has already taken a significant hit as the country grapples with stay-at-home orders and a rising death toll from COVID-19.
The council conducted its survey from April 13 to 20.
A total of 90 percent of respondents reported lower multifamily sales volume than they did three months earlier. Only 5 percent of respondents said that sales volume was unchanged, while 1 percent said sales volume had increased.
This isn’t surprising. As Mark Obrinsky, chief economist with the National Multifamily Housing Council, said, there really was no other way for the market to trend once the COVID-19 pandemic hit.
“Residents across the country are currently under directives to stay at home and practice social distancing to contain the spread of COVID-19,” Obrinsky said. “As a result, much of the nation’s economic activity has been put on hold.”
In more gloomy news, 75 percent of respondents reported that equity financing was less available than it was three months ago. No respondents said that this financing was easier to get. A total of 15 percent of respondents said that conditions were unchanged in the equity market.
Nearly three-quarters of respondents — 71 percent — reported worse conditions for debt financing compared to three months earlier, while just 10 percent said that financing conditions were more favorable.
And finally, 82 percent of survey participants reported looser market conditions in the multifamily space when compared to three months earlier. Just 5 percent reported tighter market conditions and 12 percent said that market conditions were no different than they were last quarter.
Obrinsky said that survey respondents are uncertain about the near future, waiting to see how the government’s and states’ responses to the virus play out.
“Many respondents have adopted the ‘wait-and-see’ attitude, nothing that COVID-19 has created too much uncertainty around asset pricing for much of any transactions to occur,” Obrinsky said. “There are some buyers out looking for deals, but few sellers are willing to adjust prices downward.”