NEW YORK CITY-The expanding housing inventory in the US is weighing heavily on some markets, particularly those in the Sunbelt. That’s just one takeaway from Bank of America’s latest property manager survey, which polled more than 2,500 property and leasing managers who operate in 15 of the largest multifamily markets in the country.According to the locally based firm, the survey is an effort to gauge trends in market conditions from those active in the leasing field; and the results should serve as a took to measure local market fluctuations and general trends on how renters and landlords are responding to changes in job growth, interest rates, the for-sale market and new apartment supply. The results are based on an index of 50, with scores higher than that indicating positive or improving trends, while those less than 50 indicating that trends are worsening. The poll indicates that occupancies and rents actually improved month to month, though demand is not meeting expectations. The rent index is up three points from 51.7 in April, while the May occupancy index score of 50.7 is up 1.9 points from the prior month. Most of the survey participants said rent and occupancy trends were flat, though 20% reported lower rents and 26% saw occupancies decline. The amount of incentives offered went up last month as well, as more landlords try to lure tenants with concessions to keep occupancy levels up. Some 33% of those polled say incentives had increased, and 46% say they had remained the same. Overall, the incentive index is down 2.2 points to 43.8. Although the index for traffic levels is up from 32.5 in April to 39.6 in May–the lowest level recorded so far this year–38.7% of survey participants indicate that traffic is worse than expected at this time of year, while just 18.3% said demand trends are better than expected. Still, leasing showed a bit of improvement, with that index rising from 43.9 in April to 45.1 in May. The single-family market is a significant negative force for apartment managers, about 67% of which say there is some or significant competition from that segment. On the plus side, apartment managers are reporting little pressure from new traditional rental units in their markets. Almost 60% of those polled indicated there was none or little competition, while 10% are seeing significant competition from new construction. Still, the index figures don’t necessarily reflect those trends–the single-family competition index dropped to 40.1 in May from 42.4 in April, its lowest monthly level so far this year, and the rental construction index went up four points to 58.7 in May. Broken down by market, those with the most pressure from inventory are, not surprisingly, underperforming. Texas, for one, deteriorated significantly. While local REIT management teams reported positive performance in the first quarter, the survey reflected a decline in trends, with 60% of respondents reporting worse-than-expected demand in May. In Houston, the traffic index flat-lined at 33.4 for the past two months, and while excess housing supply kept Las Vegas and Phoenix down, Florida showed some relative improvement after a weak April. Markets in which landlords offer the most concessions are predominantly in the Sunbelt, including Phoenix, Tampa and Atlanta. In these areas, apartments are competing with single-family homes and condominiums that have been put in the rental pool. The incentive index for nine of 15 markets was below 50. The best markets, meanwhile, are in the Pacific Northwest. Year-over-year traffic trends met expectations in Seattle, while the Bay Area showed improvements. Lower down along the West Coast, Southern California’s performance weakened as Los Angeles and Orange County saw a dip in demand. BofA analysts gave a marketweight rating for apartment REITs, but “remain cautious over the next six to nine months as we see more headwinds than upside catalysts–given potentially declining traffic levels, deteriorating economic indicators and limited visibility on where property-level growth and cap rates will ultimately shake out.” Their top pick is Essex Properties Trust, due to its lower-priced West Coast portfolio of class B assets in premier locations, which are “better protected than its peers from a continued deterioration in the single-family housing industry.”