Phoenix and a host of other markets perhaps have seen once-in-a-lifetime multifamily rent growth. Landlords who stuck it out since the onset of the pandemic have been handsomely rewarded with rents increasing by more than 20% annually.
But pushing rents may be more challenging moving forward as incomes fail to keep pace in one of the more development-heavy markets in the country.
Nearly 30,000 apartment units are in Phoenix’s pipeline, about half of which is slated to deliver in 2022. Both these numbers are all-time highs, and any drop off in demand would put upward pressure on the vacancy rate.
Apartment demand in the Valley of the Sun is driven by in-migration, primarily from Southern California. This trend has contributed to Phoenix becoming one of the fastest-growing population centers in the nation. If the steady inflow of new residents continues, supply pressure may likely be mitigated enough to keep the vacancy rate stable.
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