Nine is the lowest reading in the survey's two-and-a-half yearhistory. NMHC explained a score below 50 means there are moremarkets in which conditions are softening, as in slower rentincreases and increasing vacancy. A score of 50 means no change. Inresponse to the state of affairs, only a small minority ofrespondents has pulled back from development or acquisitionactivity in metropolitan areas where some industries were directlyimpacted by the terrorists' attacks, like tourism. But 55% of thesurveyed firms said they were pulling back generally from a varietyof markets.

NMHC's chief economist Mark Obrinsky said in this environment,it may be a good time to enter markets that generally have beentough to enter. "High land costs and development costs have keptnew supply low, while strong demand has boosted occupancy rates andrents," said Obrinsky. "Apartment owners in these markets have notbeen inclined to sell, and when they have, they've been able tocommand premium prices. Well-positioned firms with an eye towardthe future may see the current economic situation as presenting notonly challenges, but also opportunities."

In one finding that contradicts larger trends, the survey saidthe availability and cost of debt continue to improve. Real estateexperts have said in the aftermath of the terrorist attacks thatfinancing for real estate projects generally and the lodgingindustry in particular would become more expensive. Thedebt-financing index has improved for six consecutive quarters, butthe equity index has fallen in the most recent quarter, indicatingequity finance is less available than in previous quarter.