Phoenix Multifamily Report – Summer 2021, Part 2
Rapidly rising demand has pushed rates up nearly 20 percent year-over-year.
Phoenix’s multifamily market remained among the strongest in the country, driven by a diverse economy that continued to exert magnetism even in harsh times. This has led to robust population growth putting pressure on rents, which climbed 2.3 percent on a trailing three-month basis through July, to $1,453, and a whopping 18.9 percent on a year-over-year basis, placing Phoenix in the lead among major metros. The Lifestyle segment led rent gains, occupancy and inventory expansion.
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The unemployment rate stood at 6.6 percent in June, trailing the 5.9 percent U.S. average. Still, employment has left the negative territory, as the metro added 132,900 jobs, up 0.1 percent in the 12 months ending in May, while the national rate was -1.9 percent. All but two sectors gained jobs, led by trade, transportation and utilities (40,300 jobs) and education and health care (23,700). Manufacturing has a promising future: TSMC broke ground on its multibillion-dollar factory and has plans to build six more over the next three years; KORE Power wants to build a facility that will create more than 3,000 jobs. Both projects have completions slated for 2023.
Multifamily sales totaled $5.6 billion in 2021 through July, placing Phoenix in the top spot for investment among major metros. Meanwhile, developers delivered 5,453 units and had another 33,985 under construction.