Phoenix apartment vacancy rate is up, but investors remain optimistic

PHOENIX - Currently, the vacancy rate for Phoenix apartments is near double-digit territory, and some are wondering what this means for rent prices, as well as the home rental industry.

According to data provided by Kidder Matthews, the vacancy rate for multifamily units in Phoenix is near 10%. Meanwhile, the average asking rent per unit is around $1,500.

People walking in Downtown Phoenix these days are likely to run into people like Aiden, who moved to Phoenix from another part of the country, and are enjoying lower rent.

"Rent up there is like $3,400 for a one-bedroom," said Aiden, who came to Arizona from Washington. "Here, I think I pay $1,300."

Renters like Aiden are also encountering specials like weeks of free rent.

"I got eight weeks," said Aiden. "It was pretty nice. Pretty nice indeed!"

Phoenix apartment vacancy rate is up

It’s a much more competitive time in Downtown Phoenix, and Brent Moser with Lee and Associates said Aiden’s story is not uncommon either.

"Vacancy rates have ballooned because there’s so much product being delivered," said Brent Moser with Lee and Associates. "You had a confluence of several different factors. First, the inflation we felt in ‘21, ’22. Second, Phoenix became an emerging market and grew into its own. It became a popular place to live, and also you had low rates, so that factored into the abundant construction."

Experts believe rental prices will likely stay down or remain at this level for the next year, or maybe even two years. After that, they expect rental prices to go back up.

Brent and Grant Cardone with Cardone Ventures, meanwhile, say they remain optimistic about the Arizona market.

"There’s 384,000 apartments in Phoenix. We have about 100,000 new families coming in every year, and 40,000 new units coming on this year," said Brent.

"With 75 million Baby Boomers retiring, they aren’t interested in buying a new home, they’re going to be renters. Gen Z is going to be renters by choice -- not by economics -- they want the mobility they want the option."