Multifamily Vacancy Ticks Lower, but Supply-Side Pressures Loom in Phoenix
Q1 2024
Highlights:
- The Greater Phoenix multifamily market posted some modest improvement during the first quarter, with results boosted by a strong local economy and some seasonal leasing factors. New supply growth is expected to remain a prominent force in the market through the remainder of the year and into 2025.
- For the first time in more than two years, area vacancies dipped during the first quarter, falling 20 basis points to 7.2%. The recent improvement did not reverse the longer-term trend; year over year, vacancies in Greater Phoenix are up 80 basis points.
- After trending lower in the second half of last year, rents inched higher to start 2024. Average rents posted a gain of 0.8% in the first three months of the year. Still, at $1,587 per month, rents are down 1.7% from levels recorded one year ago.
- Fewer properties traded in the first quarter, and newer assets accounted for approximately half of the total transaction mix. The median sales price reached $324,700 per unit to start the year, with cap rates ranging between 5.25% to 5.75%.
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