Phoenix Q3 Market Report: Apartment Market Roars Back in Third Quarter
Highlights:
- The Phoenix multifamily market had a record period of absorption during the third quarter and the local vacancy rate is at its lowest point in more than 20 years. There is some ongoing economic uncertainty, and apartment construction remains active, so vacancy will likely creep higher by the end of the year.
- Absorption totaled more than 4,500 units in the third quarter, pushing the vacancy rate down to 4.8 percent. Year over year, vacancy has declined 70 basis points.
- After a decline in the second quarter, rents rebounded in the third quarter. Current asking rents are $1,212 per month, 4.2 percent higher than one year ago.
- The construction pipeline continues to fill with new projects. More than 16,700 rental units are under construction, up 50 percent from the figure one year ago.
- Property sales accelerated in the third quarter, while prices remained elevated. The median price thus far in 2020 is $161,500 per unit, up 16 percent from last year. Cap rates have held steady, averaging 4.9 percent.