Although the average rent in Arizona was hovering around $947 at the end of Q1—quite far below the national average that hit $1,316 in May—, certain spots in the desert can yield generously for landlords. In fact, that statewide average is the result of a 5.8% year-over-year growth, one of the highest state-level growth rates in the country according to Yardi Matrix. If the trend continues uninterrupted, the average rent in Arizona will reach the $1,000 mark in a year or so.
With employers like Banner Health, Wells Fargo, JPMorgan Chase & Co. or Intel, as well as the multitude of other points of interest, the fact that the areas with the highest rents form in and around the state capital doesn’t need much explanation. Only 6 Arizona ZIP codes top the national average, and these outline 3 distinct hotspots in the Phoenix Metro Area.
Standing out as Arizona’s most expensive ZIP code is 85003 in Phoenix with the average rent of $1,576. Its next-door neighbor, 85004 is hot on its heels with a $1,525 average, so it only makes sense to discuss them as a group. Together, they cover most of Downtown and a significant portion of the surrounding Central Cityand Encanto neighborhoods of the city. The good news for renters is that a spectacular inventory growth has kept a lid on rent growth. These two small zip codes have added more than 1,200 new units year-over-year through March and boosted their inventories by 53% and 85%, respectively. These were the largest relative inventory expansions in any ZIP code in Arizona—as a consequence, rents have only grown by 1% and 2%, respectively.
Rather than having just one runner-up, at the second place we can again talk about an area comprising three adjacent ZIP codes—85054 of Phoenix with an average rent of $1,423, along with 85255 and 85254 of Scottsdale with rents clocking in at $1,403 and $1,386, respectively. This cluster is located where the vast residential neighborhoods of Northern Scottsdale meet the stabilized suburbs of Phoenix’s Paradise Valley, and the Desert View area, where most of the rental inventory is made up of luxury communities.
Trailing close behind is 85281 in Tempe with an average rent of $1,345. Although it is technically the 6th most expensive ZIP code, due to the peculiar way the previously mentioned ones outlined two distinct regions, we can consider it the third most expensive area in the state. It is the ZIP code with by far the largest amount of rental units, and for its size it is also growing at a rapid pace both in terms of rental stock and rent prices. Arizona State University’s campus is undoubtedly one of the key demand drivers in the area. The ZIP code posted a rent growth of 7% Y-o-Y through March, all while adding more than 1,200 new units and boosting the inventory by 9% to the current count of slightly over 14,700 apartment units.
Meanwhile, only 4 ZIP codes in Tucson have exceeded the statewide average rent of $947. These are 85701in the El Presidio-Armory Park area with the average rent of $1,186, the 13th highest in Arizona; 85719surrounding the University of Arizona campus, with rents clocking in at $1,100, earning it 22nd place; at #39 is 85737 of Oro Valley with exactly $1,000; and 85742 in Tortolita with the average rent of $966—the 46thhighest in the state.
85003 in Downtown Phoenix is the most expensive ZIP code in Arizona with an average rent of $1,576.
Here are the 10 most expensive Arizona zip codes for rent: