Phoenix Q2 Multifamily Market Insights: Investment activity gains momentum, prices push higher


  • Construction of new units is accelerating in the Phoenix multifamily market, and the quickening pace of development is bringing supply and demand closer to equilibrium. Apartment construction levels should remain elevated for the next several quarters.
  • Vacancy has trended higher in each of the first two quarters of 2022. The rate rose 60 basis points in the second quarter, reaching 5.4 percent. Year over year, vacancy has spiked 130 basis points, following a period of rapid declines since mid-2020.
  • Even as absorption slowed, rents continued to push higher. Average rents are up 18.6 percent year over year, reaching $1,661 per month at the end of the second quarter.
  • Following a record-setting year in 2021, the investment market is off to a stronger start to this year. The pace of transactions accelerated in the second quarter, and prices surged. The median price reached $300,000 per unit in the first half of the year, 35 percent higher than in 2021. Cap rates have averaged 3.5 percent.

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