Phoenix 2Q23 Multifamily Market Insights Report: Rents stabilize at midyear, setting the stage for a rebound


  • Market conditions in Phoenix outperformed expectations during the second quarter. Net absorption has been particularly strong, with demand in the first half of 2023 already outpacing the total for all of 2022. Renter demand is offsetting much of the impact of a very active development pipeline.
  • Vacancy rose 30 basis points in the second quarter, a period where the local rate nearly always trends higher. At 6.7%, area vacancy is up 130 basis points year over year.
  • Rents inched higher in recent months, offsetting a modest dip from the start of the year. Rents are $1,616 per month at midyear. Current rents are down 2.7% from peak levels recorded one year ago.
  • While property operations have steadied, investment activity has remained limited to date. Sales velocity slowed in the second quarter but did gain some momentum in June. Cap rates averaged about 5.3%.

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