Phoenix Multifamily Market Report
Phoenix Stays Among the Nation's Fastest-Growing Metros,
Drawing Technical Companies
In-migration allows metro to overcome near-term hurdles. Movement to Phoenix in 2022 is expected to be the second highest in the nation, extending a stretch of robust population growth that recently supported a 41-quarter stretch of positive rental absorption. While this streak was halted in the second quarter of the year, the metro's 4.2 percent vacancy rate in June was 240 basis points below the long-term mean. Developers are maintaining a heightened pipeline in response to this robust demand. However, the average effective rent, which has increased by more than 40 percent since year-end 2019, is prompting some renters to seek roommates or move back with family. This combination will allow supply additions to surpass near-term demand. Still, over the long term, absorption is likely to return to previous levels, as projections call for rent growth moderation, a rise in traditional office-using jobs and wage gains.