Many Cities Have Hit 2007 Multifamily Price Levels, But Not Phoenix
The Phoenix Metro area’s multifamily pricing is still 7% below its 2007 peak in terms of price per unit, according to ABI Multifamily. We spoke with ABI director of research Tom Brophy to get the scoop.
"Whereas many markets across the US have exceeded peak sales price per unit amounts, Phoenix Metro, despite our frenetic sales pace, is still an average of 7% below our 2007 peak sales price/unit amounts,” Tom tells Bisnow.
The chart below illustrates average sales price/unit over time for multifamily properties with upwards of 100 units, broken down by year built.
Despite consistent increases in average annual rental rates and abundant new construction, although still well below peak levels, Tom tells us occupancy is far from suffering. “Phoenix and surrounding environs are at historic occupancy levels, nearing 97%, and renter retention levels, at nearly 55%, is some 3% higher than the national average,” he says.
What do these figures mean for Phoenix’s economy? “The current volatility of both the domestic and international markets has investors on the hunt for yield and, if you're coming from Europe, preservation of capital,” Tom says. “Given Phoenix's favorable dynamics, including sustained population growth, the second-highest in net domestic migration; reasonable rents, the lowest of the metros of comparable size at an average of $942; and 3.5% job growth rate, with many of the new jobs created paying above $40k per year, Phoenix is ripe for sustained investor interest."