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Market Report

Phoenix Multifamily Market Report

3Q 2023

Sun Belt’s Highest First-Half Net Absorption Total
Outpaced by Unprecedented Levels of Development

Key demand metric in Phoenix exceeds most metros. After a volatile 2022, multifamily demand in the metro has more recently outperformed on a national scale. Roughly 6,730 units were absorbed on net over the opening half of 2023, a figure that was only surpassed by New York City during the span. Returning demand is limiting the impact of new supply on vacancy, which is a welcome trend for operators, as the metro anticipates historic multifamily development moving forward. While 2023 has already seen the completion of 9,000 units, about 54,000 more were planned or underway as of August. This slate of deliveries will pin vacancy at an elevated level for the foreseeable future. However, amid returning demand, new rentals may command higher effective rents, helping mitigate a 3.6 percent slide noted in the marketwide rate over the last 12 months. 
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