"The Phoenix metropolitan's alluring combination of strong population growth and job creation continued to fuel demand for housing in the first quarter of 2001," says John Hendricks, owner, CEO and president of Phoenix-based Hendricks & Partners, a national multifamily advisory firm.

During the first quarter, apartment absorption totaled 3,120 units, nearly matching the figure put up during the same period during 2000. New construction is up although permits are off from last year's numbers, down to 2,328 versus 3,690 a year ago. Some 2,000 apartment units were under construction during the first quarter, better than the 1,656 under construction for the same period last year.

A fourth of the apartments completed and opened during the quarter are in Phoenix and another fourth in Chandler. In Phoenix, a 258-unit complex and another with 256 units opened, while in Chandler a complex with 240-units and one with 289-units delivered.

Overall vacancy is pegged at 6.3% in comparison to 6.6% a year ago. The lowest vacancy rate is in north Scottsdale, which recorded a rate of 4.6%, a full 2% lower than last year. "North Scottsdale's success can be attributed to the 40 new office projects built in the city over this last boom period," Hendricks says.

Rent growth is moderate across the Valley, with the overall average increasing 3.5% over the one-year period ending March 2001. South Phoenix posted the largest gains, with rent increases on average of 4.7%.

Of complexes with 100 units or more, 11 had been sold during the first quarter in comparison to an even dozen in first quarter 2000. The overall selling price per sf had come in at $68.91 or $55.847 per unit.