Phoenix Q4 Multifamily Market Report: After a Year of Rapid Growth, Further Gains Likely in 2022

Phoenix, Arizona, USA Downtown Skyline Aerial


  • The Phoenix multifamily market recorded its strongest year on record in 2021. Continued demand fueled rent growth that was as rapid as any major market in the country. Developers are moving projects through the construction pipeline to keep pace with demand growth, while investors are aggressively pursuing potential acquisitions.
  • After reaching an all-time low during the third quarter, the vacancy rate crept up 30 basis points in the fourth quarter, reaching 4.3 percent. For the full year, vacancy retreated 30 basis points; this marked the fifth consecutive year vacancy has tightened.
  • Rents in Greater Phoenix spiked 27.9 percent in 2021, one of the strongest increases in the country. Rents reached $1,584 per month at the end of the fourth quarter, nearly $350 per month higher than at the end of 2020.
  • The local investment market reached new highs in 2021. Transaction activity spiked throughout the year, particularly in sales of large complexes. Per-unit prices pushed higher, surging 30 percent from 2020 to 2021. Cap rates compressed throughout the year with many properties changing hands with cap rates between 3 percent and 3.25 percent in the fourth quarter.

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