By Ellen Barber | Forbes
The multifamily sector in Phoenix has been making headlines lately. The fifth-largest city in the U.S. had the nation’s fastest-rising rents in November, according to data from Yardi Matrix, a California-based provider of commercial real estate market information.
“Job growth and strong in-migration continue to fuel the desert Southwest,” says this source. And Phoenix is a prime example. Through the third quarter of 2019, the metro added 54,300 jobs year-over-year, Cushman & Wakefield reports. And Arizona as a whole continues to see net population gains as people move from other states, according to the latest data from the U.S. Census Bureau.
“The Metro Phoenix Area rental market has continued to perform, overall. Absorptions have slowed recently in select suburban market areas, as more significant levels of upper-priced new product has come to market. The frothiness suggested by individual investors’ ability to purchase newly-constructed homes in some areas, too, suggest monthly rental prices are high. We’re suggesting multifamily builders underwrite to existing newer communities rather than planning for a continuation of 5%-plus annual rental appreciation.”