Phoenix Q2 Multifamily Market Report: Rents Spike in Response to Accelerating Demand Growth

Highlights:

  • A surge in demand and a lack of available supply resulted in a record-setting period of rent growth in the Phoenix multifamily
    market in the second quarter. Demand was fueled by a surging local labor market and in-migration from neighboring areas. Apartment construction is picking up, which should help bring supply and demand more closely in balance.
  • Vacancy reached an all-time low during the second quarter, falling 40 basis points to 4.1 percent. Year over year, vacancy has tightened by 160 basis points.
  • Rents spiked in the second quarter, reaching $1,401 per month. Rents were pushed higher by an accelerating pace of renter demand and extremely low vacancies.'
  • Net absorption during the second quarter totaled almost 5,000 units, nearly doubling the figure from the first quarter. Through the first half of 2021, net absorption has exceeded 7,600 units.
  • After rising to start the year, sales of local apartment properties surged in the second quarter, spiking by approximately 50 percent. The median price year to date has risen to $197,500 per unit, while cap rates have compressed to 4.3 percent.

Read the report

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