Phoenix Multifamily Report – Fall 2019
The metro's sustained economic performance and demographic expansion continue to be reflected in its multifamily market.
Phoenix rent evolution, click to enlarge
Phoenix’s sustained economic performance and demographic expansion continue to reflect in its multifamily market. Rent gains in the metro, up 6.1 percent year-over-year through September, ranked second among the country’s major metros. The metro is still affordable, with its $1,174 average rent heavily trailing the $1,471 national rate.
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Employment growth was equally robust; Phoenix gained 60,500 jobs in the 12 months ending in July, a 3.0 percent increase year-over-year, well above the 1.7 percent U.S. average. The only decline occurred in the information sector, which contracted by 1,500 positions, while the flourishing education and health services sector expanded by 18,700 jobs. Phoenix is establishing its position as a highly competitive bioscience market, with more than $3 billion in capital expenditures planned over the next two years, $1 billion of which is already underway. Upon completion, some 7,000 jobs will be created, with major companies and university campuses contributing to the growth. Intense development activity has also boosted the construction sector by 9.3 percent.
Phoenix sales volume and number of properties sold, click to enlarge
Transaction volume exceeded $5.5 billion as of September, with a per-unit price that surpassed the national figure. Apartment construction is active, with more than 15,000 units underway and another 45,000 in the planning and permitting stages. We expect the average rent to grow by 6.3 percent in 2019.
