Research 10/ 23/ 2019

Phoenix Q3 Multifamily Market Report: Rents Spike Again in Response to Strong Absorption

Highlights:

Phoenix Q3 multifamily market snapshot
  • The Phoenix multifamily market continued to post robust performance during the third quarter. Even as more than 3,200 units came online, the vacancy rate dipped and rents continued their upward climb.
  • Asking rents reached $1,163 per month in the third quarter, 10.1 percent higher than one year ago. Rents rose 2.1 percent from the second quarter to the third quarter.
  • Vacancy dipped 10 basis points in the third quarter, retreating to 5.5 percent. The rate is down 20 basis points year over year.
  • Developers completed more than 3,200 units during the third quarter, and thus far in 2019, more than 7,300 units have come online. Projects totaling approximately 11,200 units are currently under construction.
  • Multifamily sales velocity slowed modestly from the second quarter to the third quarter, but activity to this point in the year is ahead of the 2018 pace. Year to date, the median price is approximately $132,800 per unit, up more than 10 percent compared to the 2018 median price. Cap rates have averaged 5 percent.

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