Rents Stable, Occupancy Down
Phoenix’s multifamily fundamentals were stable as the new leasing season began, with rents inching up 0.1% on a trailing three-month basis through April, to $1,587, according to the latest Phoenix multifamily market report. 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%. 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% expansion rate, outperforming the U.S. figure by 100 basis points, as reported by the national multifamily market outlook. Unemployment fell to 2.6% in March, reflecting tighter employment than the national and state averages, which were both at 3.8%. 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.
Read the full Yardi Matrix Phoenix Multifamily Market Report: June 2024
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