Phoenix 1Q23 Multifamily Market Insights: Vacancy flat in response to heightened absorption


  • Operational performance in the Greater Phoenix multifamily market was fairly steady to start 2023. Vacancy was flat and rents inched lower by a few dollars per month. The pace of new development is forecast to accelerate in the coming quarters, which should lead to increases in the local vacancy rate.
  • After rising throughout 2022, vacancy stabilized in the first quarter of this year. The rate held steady at 6.4%, matching the figure at the end of last year. During the past 12 months, vacancy has pushed up 160 basis points.
  • Rents ticked lower in the first quarter, dipping to $1,614 per month. This followed a sharper decline at the end of 2022. Year over year, average rents have dipped 0.6%, although many suburban submarkets have recorded more significant declines.
  • Investment activity remained light at the start of this year, although there was an uptick in activity in March, particularly in sales over $90 million. Cap rates trended higher, reaching an average of 5.3%. The median price has retreated, totaling $233,700 per unit year to date.

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