The Phoenix multifamily market is making progress toward recovery as 2024 comes to a close, supported by easing inflation and rising consumer confidence. These factors have reignited renter household formation, leading to a rebound in tenant demand. Over the past 12 months, Phoenix recorded 20,000 units of net absorption, significantly outpacing the pre-COVID five-year annual average of 7,200 units. Notably, mid-priced 3 Star properties have shown a strong turnaround, absorbing 5,000 units after years of negative net absorption.

Despite these positive trends, the market faces challenges from a construction surge. Builders delivered 25,000 new units in the past year—more than three times the annual average from 2015 to 2019. An additional 27,000 units are under construction, representing 6.7% of existing inventory and ranking Phoenix as the sixth most aggressively built apartment market in the U.S. This oversupply has pushed the metro-wide vacancy rate to 11.5%, with high-growth areas like Downtown Phoenix, Tempe, and the South West Valley seeing the most accumulation of empty units.

Market performance has varied by property type. Workforce housing has been more insulated from supply pressures, with vacancy rates rising modestly and rents showing a slight positive growth of 0.09% over the past year. In contrast, luxury properties have faced steeper challenges, with vacancy rates exceeding pre-pandemic highs by over 600 basis points and rents declining by 2.6% year-over-year.

Heightened competition has led to widespread rent concessions, with many properties offering up to eight weeks of free rent in lease-ups and four weeks at stabilized communities. Over 40% of properties are now offering some form of discount, reflecting the market's struggle to balance supply and demand.

Looking ahead, the market is expected to face peak vacancy rates in 2025, with a gradual recovery anticipated by the end of the year. However, meaningful rent growth may take longer to materialize as the oversupply from recent years is absorbed. By 2026, the market is expected to stabilize, with vacancy rates compressing and rent growth regaining momentum.

Despite current challenges, Phoenix remains a dynamic and evolving market with strong long-term growth potential. Investors and developers who navigate the current conditions strategically will be well-positioned to benefit from the market's recovery and future opportunities.

Phoenix MULTIfamily Market FAQ

 1. What is the current state of the Phoenix multifamily market?

The Phoenix multifamily market is showing signs of recovery in 24Q3. Easing inflation and rising consumer confidence have boosted renter demand, resulting in 20,000 units of net absorption over the past 12 months. However, vacancy rates remain elevated at 11.5%, largely due to a surge in new construction.

2. How does the current net absorption compare to pre-COVID levels?

Net absorption over the past year has outpaced pre-COVID five-year annual averages of 7,200 units, marking a significant improvement in tenant demand.

3. What property segments are performing best?

Midpriced 3 Star properties have shown a strong recovery, absorbing 5,000 units in the past year. Workforce housing has also remained relatively stable, with slight positive rent growth of 0.09%.

4. How is the luxury segment performing?

Luxury properties are facing challenges, with vacancy rates over 600 basis points higher than pre-pandemic levels. Rents in this segment have declined by 2.6% year-over-year, and concessions are widespread.

5. How has construction activity impacted the market?

Construction has surged, with 25,000 new units delivered in the past 12 months and 27,000 more under construction. This represents 6.7% of existing inventory and has contributed to elevated vacancies, particularly in high-growth areas like Downtown Phoenix, Tempe, and the South West Valley.

6. Are rent concessions common in the current market?

Yes, rent concessions have increased significantly. Over 40% of communities are offering discounts, with many properties providing six to eight weeks of free rent for lease-ups and four weeks for stabilized units.

7. What is the outlook for the Phoenix multifamily market?

Vacancy rates are expected to peak in 2025, with gradual recovery anticipated by the end of the year. Rent growth may remain subdued in the near term but is expected to accelerate by 2026 as the market adjusts to oversupply and vacancy rates begin to compress.

8. Is the Phoenix multifamily market still a good investment opportunity?

Despite current challenges, Phoenix remains a high-growth market with strong long-term potential. Strategic investments in well-positioned properties and segments like workforce housing could yield favorable returns as the market stabilizes and recovers.

Phoenix Multifamily Homes: How to Choose the Right Home for You [2022 Edition]

Choosing the right Phoenix multifamily home requires careful thought and consideration. Phoenix offers a variety of outdoor recreation, excellent employment opportunities, world-class golf, and a downtown that is lined with excitement, boutiques, unique small businesses, and much more. It is easy to see why Phoenix multifamily homes are highly desirable. In addition, great amenities, superb education facilities, and welcoming neighborhoods make investing in a Phoenix multifamily home a strong and reliable investment.

The Ultimate Guide To Selling A Triplex In Arizona In 2022

Selling a triplex in Arizona requires a certain level of skill, transparency, and perhaps, a great Arizona real estate agent. Though there are enormous positives to owning a triplex, selling a triplex is a process that requires attention to detail, practical communication skills, and a level of organization. A triplex is a structure that houses three different suites, all under one roof. Selling a triplex takes a certain amount of work and effort, but don't worry; we're sharing all the details you require to make it happen in the Ultimate Guide to Selling a Triplex in Arizona in 2022. We will touch on important details, things that are often overlooked, and much more. By the end, you'll have everything you need to start your journey selling a triplex in Arizona.

Buying a duplex is a fantastic idea if you are looking to make some good income on a rental property. Many Phoenix investors prefer duplexes as a step up from renting single-family homes, and they find it is a great stepping stone to multi-family property rentals. If you have ever thought about buying one yourself, have a look at this comprehensive guide to buying a Phoenix duplex for sale in 2022.

Arizona is becoming a great place to check out for anyone that is looking for larger properties like duplexes. These properties are excellent for income, and they are very low maintenance compared to single-family homes or multi-family properties, so they are always in demand. If you have been thinking about selling your duplex, have a look at this list to see the top 7 things to know about selling your duplex in Arizona.

Investing in real estate has become a great alternative for people who don’t want to deal with the volatility of the stock market. Investing in real estate propels investors to be more active and play a crucial role in the economy’s growth. Today, the idea of passive investments managed by a third party is getting old.

One of the hallmark aspects of investing in real estate is that it allows investors to tap into various strategies to ensure high ROI. You may not be aware of it but many investors continue to leverage multi-family investing to create and maintain a billion-dollar fortune.

Investment in commercial and residential properties has skyrocketed in the last few years. And why wouldn’t it? Read on to learn more about multi-family real estate investment, analyzing different opportunities and the main reasons to invest in multi-family homes in the U.S.

Today, effective and efficient property management renders a high ROI and ensures stable financial income for landlords. However, choosing from a diverse range of property managers and property management firms can be overwhelming.

If you’re wondering how to find the best property manager, the answer is often straightforward. When choosing a property manager, the trick is to establish specific criteria. Despite the selling points, make sure the property manager offers services that align with your needs.

The services offered might be similar, but most professional property managers have different approaches. Lean towards a highly knowledgeable and competent property manager who is aware of the current market dynamics and can find solid tenants for your properties.

Interested in a career in real estate? Contact Our Team

To generate leads on Facebook, I have tested many different ads to find out what works and what doesn’t. What I have found is that home evaluation ads work great for seller leads.

The great thing about these ads is that you get a list of potential sellers within a certain area. Typically, when one of these leads is wondering what their home value is, they haven’t chosen an agent to list their home yet.

To start, we will create a Facebook ad specifically for lead generation. In this ad, you’ll choose a house that looks like a home in the area you want to target. You then will draw a radius from one to 10 miles. The greater the radius, the more people you may be able to reach.

From there, you’ll target a more specific audience. You don’t want to target every single person in that area, so we usually look at those who are age 25 and up, are likely to move, and who are already homeowners. Also, exclude any job titles such as “real estate agent” and “real estate broker” and any employers that have brokerages such as Keller Williams, RE/MAX, etc.

After that, you need to set a budget and decide the duration of the ad. Facebook will then estimate your potential reach and your potential leads based on that budget and duration. After setting the budget, you’ll choose the format of the ad. In this case, simpler is better, so we usually use a single-image ad. You also want to use shorter content for the headline such as “Find Your Current Home Value Here.” The ad should also include a call to action, where leads will click on “Learn More.”

The last step is to link it to a home evaluation tool. There are many to choose from—just pick the one you like best. You want to capture their full name, address, phone number, and email. Once you have finished the ad, Facebook reviews it, approves it, and services it to your audience.

If you have any questions about implementing this lead generation strategy for yourself, please feel free to reach out to me. I would be happy to assist you.

Rental properties can be an excellent investment and provide a steady stream of income, but only if they are well-managed. Nothing can turn a rental dream into a nightmare situation faster than bad tenants. That’s why screening tenants is such a crucial part of the process and should be completed thoroughly and carefully before signing a lease.

There are a handful of things landlords and rental property owners will want to consider when screening tenants. This guide will touch on the basics of what to look for in a tenant, how to go about conducting a background check, and some questions to ask during an interview.

It’s important to remember that each situation is unique, so not every tip may apply to every landlord. The most important thing is to use good judgment, trust your gut, and be as thorough as possible in order to find the best tenants for your rental property.

Are you a landlord who's looking to rent out your property? If so, you may be wondering how to make it look its best. By staging your rental property, you can make your home or rental property more appealing to potential tenants and help speed up the rental process. 

Just as potential buyers want to see a well-kept, stylish home that they can envision themselves living in, so too do potential renters. By taking the time to stage your rental property, you’re more likely to attract high-quality tenants who will take care of your home.

Not sure how to get started? Here are 13 tips for staging your rental property: