Phoenix Multifamily Report – June 2022

After a stellar 2021, the city's rental sector shifted down a gear.

Phoenix rent evolution, click to enlarge

The Phoenix multifamily market had one of the strongest performances of 2021, sustained by a robust and diverse economy and an ideal location. Expectedly, in the first quarter of 2022, this stellar performance moderated, with rents up just 0.4 percent on a trailing three-month basis through April, to an average of $1,645. Record deliveries in 2021, paired with slowed in-migration, have left a mark on the occupancy rate in stabilized properties, down 50 basis points in the 12 months ending in March, to 95.7 percent.

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Phoenix sales volume and number of properties sold, click to enlarge

The unemployment rate stood at 2.4 percent in March, surpassing pre-pandemic values, according to data from the Bureau of Labor Statistics. The rate was ahead of both the state (3.3 percent) and the nation (3.6 percent). Phoenix’s employment market posted a 4.7 percent expansion in the 12 months ending in February, on par with the U.S. rate. All sectors expanded except government, which lost 200 jobs. The metro’s largest employment areas led job gains and are poised for sustained expansion; the metro ranked fifth nationally in the data center industry and first in industrial construction volume.

Developers delivered 2,772 units through April and had 38,650 units under construction. Meanwhile, transaction volume amounted to $3 billion, for a price per unit that increased by a substantial 40.4 percent year-over-year, to $295,789.

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