Metro on Pace for Breaking Multiple Records

The five cities that make up the Metro have been analyzed by ABI Multifamily.

PHOENIX—The metro is on pace to break multiple records, having been at the epicenter of one of the most significant demographic shifts of the last 50-plus years. Rental rate increases, averaging 3.2% per year across the cities surveyed by ABI Multifamily , and sustained construction have dinted average occupancy rates which are currently hovering near 96%, well above historical trends. In a recent metro per-city analysis by ABI that examines rents, occupancy, population and affordability, Scottsdale and Tempe, AZ were the top metros for real estate-related increases while Phoenix recorded population growth. Scottsdale had the highest percentage increase in rents from 2010 to year-to-date 2016 at 52.1% to its current average rental rate of $1,253. Despite taking the top spot for highest increase, Scottsdale is still the most affordable of the five cities surveyed as its per-capita income of $51,554 equates to 29% of income spent on rent (below the affordability threshold of 30%). Despite having significant construction deliveries and with 2,000-plus units currently in the pipeline, Tempe, AZ had the highest percentage occupancy rate increase from 2011 to year-to-date 2016, increasing 4% to 95.1% average occupancy. Scottsdale had the top spot at a current average occupancy rate of 96.6%. Mesa, AZ had the highest percentage population increase from 2000 to 2015, estimated at 19%, while Phoenix had highest actual population count increase at 241,980 or 18.3%. Mesa also leads with a 17.6% increase in the amount households classified as renter-occupied housing, while Phoenix was on top from 2010 through 2014 with an 8.5% increase. Thomas Brophy , director of research, ABI Multifamily, tells GlobeSt.com: “The Phoenix Metro apartment market and corresponding cities analyzed (and US as a whole for that matter) are at the confluence of both tremendous demographic and economic forces. Sustained increases in population and renter-occupied household formation to near 0% interest rates in the US and negative interest rates abroad in Europe and Asia have sent investors in search of stability and now yield. Phoenix Metro’s attractive market fundamentals, as detailed in the analysis, should continue to attract businesses, investors and renters.”