Phoenix Multifamily Report – June 2024
Healthy demand is getting closer to matching the recent record supply.
Phoenix’s multifamily fundamentals were stable as the new leasing season began, with advertised asking rents inching up 0.1 percent on a trailing three-month basis through April, to $1,587. This followed 20 months of flat or negative performance. Last year’s strong supply volume took its toll, with occupancy down 80 basis points year-over-year through March, to 93.1 percent. However, overall absorption still points to steady demand.
The Phoenix job market added 52,700 net jobs in the 12 months ending in February, for a 2.5 percent expansion rate, outperforming the U.S. figure by 100 basis points. Unemployment fell to 2.6 percent in March, reflecting tighter employment than the national and state averages, which were both at 3.8 percent. Four sectors—information, leisure and hospitality, manufacturing and financial activities—lost a combined 8,300 jobs during the period. Meanwhile, education and health services (27,200 jobs) and government (11,800 jobs) led gains. Despite the current slowdown, manufacturing has bright prospects, with several projects underway, including massive facilities from Intel, TSMC and Amkor Technology.
Developers delivered 3,134 units this year through April and had an additional 35,972 apartments underway. Construction starts, however, declined to 2,120 units in the first four months of the year. Meanwhile, investment remained tepid, with $715 million in assets trading through April, for a per-unit price that stood its ground.
