Phoenix apartment rents are climbing faster than anywhere else in the U.S.
Though the Arizona market tied with Las Vegas to claim the top spots for rent growth in 2018, Phoenix has taken the lead in January. According to RealPage, Inc., Phoenix is seeing 8.1% year-over-year rent growth, making it the nation’s top-performing market.
Though Phoenix rents are growing much faster than the national average increase of 3.4%, effective monthly rents are still much lower at an average of $1,093 compared to the U.S. figure of $1,356.
In addition to Phoenix, other markets with the highest rent growth in the nation were Las Vegas (7.6%), Sacramento (5.6%), Atlanta, Memphis and Greensboro/Winston-Salem (tied at 5.3%).
Despite fast-rising rents, Phoenix renters are still filling up apartments at healthy rates. Occupancy across the market is tight at 95.4%.
“The Phoenixapartment rent growth numbers are fantastic any way you slice and dice the data. It looks like the market’s overall performance is hitting a peak. Solid job production is helping fuel substantial demand for housing, and apartments are getting a big share of that, especially as home sales have cooled a bit in the past few months,” RealPage Chief Economist Greg Willett said. “However, look out for the near-term apartment delivery volumes in the Valley. New supply is moving back toward the highs recorded in the previous couple of economic cycles. It will get harder to maintain sky-high rent growth in Phoenix as apartment building activity continues at an aggressive pace.”
Just under 8,000 units came online in Phoenix in the year-ending January 2019, which was the eighth-biggest delivery volume in the nation. Meanwhile, demand remained well above supply, as more than 10,400 units were absorbed. About 8,500 units are expected to come online in Phoenix over the next 12 months, accounting for a 2.4% increase in supply.