Rentals Hold Steady
March 23, 2015 |
Written by Debra Hill-Fox
The home rental arena has seen a consistent incline for the past several years. Average rental prices and vacancy rates have become the hot topics as industry reports continue to point out that renting is the popular housing choice in Phoenix metro, especially for the millennials. It has become normal to see apartment communities popping up all over the Valley. Rental rates have been steadily increasing from an average of $750 in 4th quarter 2012 to an average of $808 in 4th quarter 2014. However, in 2015 we’ve seen rental rates remain fairly steady from the 2014 increases as the homeownership market is coming back.
Below are some average Phoenix metro statistics related to rentals:
Highest Rent: South Scottsdale:
- $1,126 ($981 in 4th quarter 2013)
Lowest Rent: West Central Phoenix:
- $559 ($583 in 4th quarter 2013)
The end of 2014 was the 10th consecutive quarter of year over year asking rent increases with 27 out of 30 submarkets having higher asking rents than they did in 4th quarter 2013. In fact, the last quarter of 2014 recorded the highest ever average rents in Phoenix metro. At the same time, 2015 eviction filings have declined and complaints for fair housing have risen, which suggests a slowing trend in future rent growth.
Highest Vacancy: South Scottsdale:
- 17.5% (11.8% in 4th quarter 2013)
Lowest Vacancy: NW/SW County:
- 2.7% (8.1% in 4th quarter 2013)
Highest Concession Ratio:
- West Central Phoenix – 89% (72% in 4th quarter 2013)
Lowest Concession Ratio:
- NW/SW County 0.0% (33% in 4th quarter 2013)
The year 2014 generated 24 projects comprising of 5,658 units added to the market. In 4th quarter 2014 there were 34 projects comprising of 8,298 units scheduled or under construction in 2015.
The rental market in Phoenix metro will continue to remain strong throughout this year. It will be interesting to see how steady rental rates and the growth of homeownership will impact the real estate market overall.
For more details on the rental market, be sure to attend the Leasing & Management “101 Things You Need To Know” seminar on Friday, April 24th at our Scottsdale campus. REGISTER HERE
Source: Marcus & Millichap