Phoenix Multifamily Report – January 2024

Fundamentals take a dip after the post-pandemic surge.

Responding to the surge in demand and rent growth, developers expanded Phoenix’s pipeline in recent years, but now the metro has reached the tail end of its stellar post-pandemic perfor­mance. The average asking rent contracted 3.7 percent on a year-over-year basis through November, posting the second-weakest perfor­mance among Yardi Matrix’s top 30 metros. At $1,583, Phoenix was still affordable compared to the U.S. figure, which inched up 0.4 percent during the year, to $1,713. Meanwhile, occupancy held on surprisingly well, declining just 60 basis points in the 12 months ending in October, to 93.4 percent.

Phoenix’s employment market expanded 2.1 percent in the 12 months ending in September, 20 basis points behind the U.S. rate. While three sectors lost jobs—information (-2,700 jobs), other services (-1,500) and manufacturing (-500)—the bulk of the 51,700 positions added were in the education and health services (20,700 jobs), lei­sure and hospitality (9,600) and government (7,700) sectors.

Deliveries marked a new decade-high, amounting to 11,980 units through November, and unlike the national trend, new construc­tion starts in 2023 increased from 2022’s volume. The pipeline had 35,088 units under construction. Meanwhile, investment moderated, with $2.5 billion in multifamily assets changing hands, for a price per unit that fell 14.6 percent from 2022 rates, to $272,467 as of November.

Read the full Yardi Matrix report.

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