Phoenix Q3 Multifamily Market Insights: Rapid Rent Growth Fueling Investment Market

Highlights:

  • The Phoenix multifamily market continued to post some of the strongest operating conditions in the country during the third quarter. Rents spiked again, building on gains from the preceding three months, while vacancy rates ticked lower for the fifth consecutive quarter.
  • After reaching its lowest point on record during the second quarter, the local vacancy rate tightened again in the third quarter. Local vacancy fell 10 basis points to 4 percent in the third quarter; year over year, the rate has declined 80 basis points.
  • Rents continued to spike in the third quarter, reaching $1,543 per month. Area rents have increased 27.3 percent in the past year, with the greatest increases occurring in the second and third quarters.
  • Sales of multifamily properties remained quite active during the third quarter, closely tracking levels recorded in the second quarter. Transaction activity has surged among newer properties. Prices are rising, with the median price year to date up more than 20 percent from 2020 levels. Cap rates have continued to compress as investor demand has intensified.

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