BLOG

KW PHOENIX APARTMENT GROUP

Keller Williams Arizona Realty

15333 N Pima Rd., #130

Scottsdale, AZ 85260

T 480.767.3000

F 480.629.5105


Bookmark and Share
Effects of Rising Interest Rates on Commercial Real Estate

Interesting article on the Effects of Rising Interest Rates on Commercial Real Estate deal

From  JP Morgan Chase Bank


https://commercial.jpmorganchase.com/pages/commercial-banking/cre/effects-hiking-interest?mkt_tok=eyJpIjoiTTJWaVpHVTFNamhsTnpCaCIsInQiOiJ4OWlWYTduNm5xMmRxcHJnZWh3Y1l4MUZMSFlZdTlaT2d1U3JyRE5LR0JGTDFhK3c3eUp0V0g2TCsycTM3cGZyalR5dytOcTVcL1pFbjJMUDBoZVZjXC93R1hnZGtMYzdLeWhCZUZZYnJmS01HeSt1TE9QOTlyM3VQU084UzZ6RlptIn0%3D

Tax Talk Triggers Pricing Drop for LIHTCs

Beth Mattson-Teig

4 Reasons Iinvestors Can Still Look to Multifamily as a Safe Bet

By Champaign Williams, National Editor of Bisnow


The multifamily market is showing signs of a moderate slowdown this year, with average apartment rents decelerating on a national scale and incoming supply expected to push up vacancy rates. Experts say the sector will remain strong amidst these challenges, as outlined in Yardi Matrix’s U.S. Multifamily Outlook report. Below are four reasons the multifamily market remains a good bet for property investors.

1. Rents Exceed Long-Term Average

 Though rent growth decelerated nationally for the fourth month in a row with average rents dropping $4 in December, overall rent growth in 2016 was upward of 4%, still exceeding the long-term average. Growth is expected to return to more sustainable levels within the next few years, but the sector will remain a safe bet for investors, Yardi reports. 

2. Millennials Continue To Drive Demand

 Multifamily demand will remain strong. The country’s largest generation remains partial to renting over home ownership, and Yardi does not foresee those preferences changing soon. Millennials enter their prime renting ages between 20 and 34 years old, and as the generation ages, roughly 2 million more Millennial renters will enter the market. Yardi reports Millennial demand isn’t likely to peak until 2024, when 70 million Millennial renters are projected to hit the market. 

3. Heavily Concentrated Supply 

 Much of the incoming supply will not impact most metros' fundamentals. A large amount of apartment supply remains at the high end of the spectrum and will hit high-rent markets like San Francisco, Denver and Austin, while demand remains strong for apartments at the middle/lower end of the scale. Roughly 320,000 units are expected to come online this year, Yardi reports, up 5.3% from 2016.

4. Occupancy Levels 

 Supply has yet to exceed the number of multifamily households, which increased by 9.3 million between 2005 and 2015, according to the Census Bureau. As a result, occupancy levels remain stable, with October's 95.8% nearly an all-time high.



How The Trump Presidency Could Impact The Apartment Market

Forbes Magazine


Now that Donald Trump baffled most of the pundits to secure the U.S. presidency, a host of people from different industries are beginning to study how the Trump administration’s policies will affect them over the next four years and beyond.


Those in the apartment industry are trying to get a beat on how the economy might look, with its effects on the U.S. job market and the atmosphere for investments. Jobs are sure to be a focal point, as one major factor in Trump’s victory was that his message about job creation resonated with blue-collar workers in the Rust Belt who have voted Democratic in the past.


FULL ARTICLE HERE


http://www.forbes.com/sites/axiometrics/2016/11/10/how-the-trump-presidency-could-impact-the-apartment-market/#29747826514a


Yardi October 2016 US Apartment Report


yARDI Rent Survey | October 2016

National averages include 119 markets tracked by Matrix, not just the 30 metros featured in the report. All data provided by YardiMatrix.

National Average Rents

Continuing a trend of steady deceleration, average U.S. monthly rents fell by $3 in October, to $1,216, according to Yardi Matrix’s monthly survey of 123 markets. Although relatively slight, the decline in rents was the biggest drop in three years, since the average fell by $3 in October 2013. On a year-over-year basis, rents grew 4.4% nationwide in October, a 30-basis-point decline from September and a 230-basis-point fall from the recent high of 6.7%, in October 2015. The decline demonstrates a reversion to more “normal” rent growth that we forecast at the beginning of the year. Given the seasonal nature of apartment rents, the consistency of growth in recent years represents more of a historical outlier than the current moderation.

What is causing the deceleration? There are a number of factors, but two stand out. One is that the outsize growth of 9-plus percent seen in so many metros through late 2015 and early 2016 has moderated. Sacramento, which tops our survey with a surprising 12.1% year-over-year growth, is the only metro above 7.4%. The other key factor is
that the spate of supply of high-end Lifestyle apartments has effectively put a lid on rent growth in some metros, in some cases in tandem with a slowing rate of job growth. The rate of growth remains higher for lower-cost Renterby-Necessity units than upscale Lifestyle units.

The deceleration is far from being a sign that the sector is overheated. Fundamentals in most markets continue to be strong. Occupancies of stabilized properties are not far from cyclical highs, while the growing population coupled with strong job numbers is producing above-trend household formation that leads to demand for apartments. Some 26 of our top 30 metros are above the 2.3% long-term average for rent growth,
and we expect that to continue in most markets. Metros where rent growth has dropped swiftly (i.e., San Francisco, Houston and Denver) have issues with supply, affordability and/or job growth. 

FULL REPORT CLICK LINK

Preparing Apartments for the Future

Multifamily Executive

When most people think about future-proofing, wire—or, rather, the lack of wire—in tomorrow's apartments is top of mind. But as Mike Smith, vice president of Whitespace Building Technology, reminded attendees at the Multifamily Executive Conference in Las Vegas, there's a much broader definition that incorporates technology and data to improve the management, operations, resident experience, and capital efficiency of physical assets.

That use of technology and data could include thermostat control, unit door-lock control, window sensors, lighting control, real-time energy monitoring, leak detection, humidity/mold control, and more. Above all, buildings should operate on a dedicated network that isn’t the resident Wi-Fi network.

 

Click Here for Full Article

http://www.multifamilyexecutive.com/technology/preparing-apartments-for-the-future_o?utm_source=newsletter&utm_content=Article&utm_medium=email&utm_campaign=ConceptCommMFE_101016%20(1)&he=


 

 

Higher Incomes Should Help Renters and Landlords of Class-B and Class-C Buildings


National Real Estate Investor

Higher household incomes are great news for the apartment business—both for property managers and for residents.

“The demand for housing—particularly among young adults—may be growing,” says Dan McCue, senior research associate for the Joint Center for Housing Studies at Harvard University.

Read Full Article Here

http://m.nreionline.com/multifamily/higher-incomes-should-help-renters-and-landlords-class-b-and-class-c-buildings





Yardi September 2016 Report

Yardi US National Multifamily Report - September 2016

National averages include 119 markets tracked by Matrix, not just the 30 metros featured in the report. All data provided by YardiMatrix.

National Average Rents

The deceleration of multifamily rents continued in September. Although basically flat, average U.S. monthly rents dropped for the first time since November 2015, falling to $1,219, compared to $1,220 in August, according to Yardi Matrix’s monthly survey of 123 markets. On a year-over-year basis, rents grew 4.7% nationwide in September, a 30-basis-point decline from August and a 200-basis-point fall from the recent high in October 2015.

While rent growth keeps decreasing, multifamily fundamentals remain strong. Occupancy has remained unchanged since May and is staying near historic highs. The employment sector, while not as robust as it once was, has been creating jobs at a steady pace. Demand for multifamily housing is forecast to remain high, as Millennial household formation continues and Boomers seek to downsize and re-enter the rental market. Despite the deceleration trends,26 of Yardi Matrix’s top 30 markets experienced year-over-year rent growth of 3% or better in September. Once again, year-over-year rent increases were led by Sacramento (11.1%), followed by the Inland Empire and Seattle (both at 9.0%). Rent growth has significantly outpaced economic expansion and wage growth in the last three years, and the recent deceleration aligns with historical rent growth rates.

Completions of new apartment units are projected to reach 360,000 in 2016, marking the largest number of annual completions in the current cycle. New supply, coupled with slower albeit strong and steady macroeconomic fundamentals, will maintain a downward pressure on rent growth. Significant supply increases are occurring in San Francisco, Denver and Houston, metros where rent growth was 2% or below on a year-over-year basis in September. As supply is absorbed and construction moderates, these metros will
likely revert back to a stable long-term growth rate.

FOR FULL REPORT CLICK HERE  

https://www.yardimatrix.com/downloads/Reports/matrix-monthly/Yardi-Matrix-Monthly-Sep-2016.pdf?signup=false&utm_source=WhatCountsEmail&utm_medium=Yardi%20Matrix%20Rental%20Market%20&%20Multifamily%20Outlook&utm_campaign=10-03-16%20Matrix%20Monthly-September

Yardi August 2016 US Multifamily Report

Multifamily Rents Decelerate as Tech Metros Slide

U.S. multifamily rents inched up in August as the anticipated deceleration in growth started to take hold. Average U.S. rents increased by $3 in August, to their eighth consecutive monthly record of $1,220, according to Yardi Matrix’s monthly survey of 120 markets. On a year-over-year basis, rents were up 5.0%, which is down 50 basis points
from the previous month, 110 basis points from April and 170 basis points from the recent peak last October.

Even though overall rent growth is cooling, fundamentals in most of the country remain strong. Occupancy rates have declined slightly, but they remain extremely high across the country. Job growth has slowed a bit, but continues at a pace of roughly two million per year, enough to keep apartment demand generally robust. The number of metros with outsize year-over-year rent gains has declined to a small number compared to the second half of 2015 and early 2016, but 18 of Yardi Matrix’s top 30 metros—60%—have seen solid growth of between 4 and 7% over the past year. Rent increases were led by Sacramento (11.9%), Seattle (9.3%) and the Inland Empire (9.2%).

The recent deceleration has been most pronounced in some technology-centric metros, which are coming back to earth due to the combination of waning demand and affordability issues in the face of growing supply. San Francisco, which had 12% growth in rents in 2015, has slowed to 1.6% year-over-year through August. Denver’s year-over-year growth rate has fallen to 3.5% in August after rising by 11% in 2015. Other markets that have seen significant deceleration include Austin (up 4.8% year-over-year through August compared to 6.9% growth in 2015) and Boston (2.2%) year-over-year, compared to 5.2% in 2015). Although these metros were not as frothy as San Francisco or Denver, they are both tech-led markets in which growth has declined by about four percentage points in recent months.

Full Report Here

Suburban Apartment Buildings Match Downtowns for Price Appreciation

By Bendix Anderson

NREI


Prices for apartment properties in the suburbs grew at the same pace over the last five years as they did in central business districts (CBDs).

“Returns from property appreciation over the past five years were virtually tied between suburbs and downtown areas,” according to an analysis of investment returns among privately-owned, institutional-grade real estate across the top 50 U.S. apartment markets by MPF Research, the market intelligence division of RealPage Inc.

The trend represents a significant change. In the past, apartment properties in urban downtowns tended to provide the best investment returns from appreciation. That was especially true over longer periods that included economic downturns. But over the last five years of economic recovery, suburban apartment properties have caught up to apartment properties downtown, particularly in the strongest suburban submarkets, where rents are rising most quickly.

Strong returns

In both suburbs and CBDs, the return on investment from price appreciation averaged 7.3 percent over the last five years, according to an analysis of NCREIF data by MPF/Yieldstar. That includes an average return from appreciation of close to 8.0 percent in suburbs where rents and the number of jobs grew quickly and an average return close to 8.0 percent in CBDs where the number of jobs grew quickly.

These strong returns from price appreciation are impressive. But rents are also rising more quickly in the strongest suburbs than in CBDs. Apartment buildings downtown now often have to compete with the many newly opened high-rises. Rents grew less than 2.0 percent for apartments in CBDs in the 12 months that ended in the second quarter, according to research firm CoStar Portfolio Strategy. Rents grew twice as quickly—by more than 4.0 percent over the same period—in prime suburban and suburban markets.

“Urban areas have enormous volatility in rent movement—and got hit the hardest in the last recession,” says Jay Parson, vice president for MPF, which has already published several reports that show the apartment rents have risen more quickly in high-performing suburbs than in CBDs. “Top tier suburbs got hit less in the recession, and perform just as well, if not better, in good times.”

Downtowns still strong in downturns

Over longer periods of time that include economic downturns like the Great Recession, apartment properties in CBDs show better price appreciation than do properties in the suburbs.

“Urban areas still benefit from superior capital appreciation… They will hold their value better in bad times. Not because of cash flow, obviously, but because of perceived liquidity,” says Parsons. In other words, because so many investors perceive urban areas to be superior to suburbs, it’s easier to find deep-pocketed buyers for urban assets in tough times.

“There is now a disconnect between where investors see the most value—urban areas—and where investors are actually generating the most income—top-tier suburbs,” Parsons adds. “It will be interesting to see how long that dichotomy can persist… are investors chronically undervaluing top-tier suburbs?”

Strong rent growth is the fundamental driver behind property price appreciation for suburban properties. In many top suburbs, apartments are even more difficult to build than in downtown areas. In suburban markets where developers have been able to build more apartments than downtown, rents have grown less and price appreciation has lagged.

For example, in the suburbs of Washington, D.C., developers have managed to open more new apartment building than the sub-markets need. Many developers have been forced to offer concessions of lower rents to potential resident to lease up vacant apartments.

“As a result, these properties have not experience the same degree of rent growth and cap rate compression as the urban markets,” says Walter Coker, managing director for HFF, a capital services provider. “As the abundance of supply diminishes in the D.C. suburbs, we expect strong rental growth and associated value increase to resume.” 

Yardi August Report

Rent Survey | August 2016

Multifamily Rents Decelerate as Tech Metros Slide 


U.S. multifamily rents inched up in August as the anticipated deceleration in growth started to take hold. Average U.S. rents increased by $3 in August, to their eighth consecutive monthly record of $1,220, according to Yardi Matrix’s monthly survey of 120 markets. On a year-over-year basis, rents were up 5.0%, which is down 50 basis points from the previous month, 110 basis points from April and 170 basis points from the recent peak last October.

Read Full Report here

Metro Phoenix had 4th-highest rise in rental rates in U.S., but 10K new apartments are on the way

 Catherine Reagor, The Republic | azcentral.com

It’s getting pricier for the convenience of calling your landlord when the AC breaks, the internet is down or the swimming pools needs cleaning.

Rents are on the rise in metro Phoenix, particularly in infill hot spots in Phoenix, Scottsdale and Tempe.

The Valley’s average apartment rent has climbed 22 of the past 23 months, according to national research firm Axiometrics.

The average apartment rent in the Phoenix area is now $924, according to the rental data firm RealPage. That’s about $70 more than it was a year ago.

Demand for rentals surged during the housing crash when so many people lost homes to foreclosure and had to rent.

Adding to that already big pool of renters are Millennials who aren’t ready to or don’t want to buy homes.

But higher rents are also bringing more apartment construction.

Apartments leading the way for homebuyers

Tempe launched the Valley's latest apartment development spree a few years ago, when new high-end complexes started going up around the city's lake and Arizona State University.

Now, long-vacant prime parcels idowntown and midtown Phoenix are sprouting new apartment complexes. And older buildings in central Phoenix and Scottsdale are being torn down to make way for new apartments and condominiums.

  • Tom Simplot, CEO of the Arizona Multihousing Association and a former Phoenix councilman, told me apartments lead the way for people to buy homes in an area.

    "People first became comfortable living in central Phoenix by renting," he said. "Those of us living downtown are no longer urban pioneers, and we welcome all the new people and growth, whether rental or homeowners."

    Rents are climbing in many big U.S. metros, but Phoenix saw the fourth-biggest U.S. increase in rents during the summer, per RealPage stats. Sacramento was No. 1 with an almost 10 percent jump. Portland and Seattle saw increases of more than 8 percent.

    Phoenix’s almost non-stop increase during the past two years is a bit unusual.

    “Two years of almost nothing but increases in average rent is just about unheard of, given seasonal cycles and volatility in most metros,” said Stephanie McCleskey, vice president of research for Axiometrics.

    She cites the Valley’s job growth as a big reason behind the area’s long streak of rent increases.

    About 70,000 new jobs were added in metro Phoenix during the past year.

    And now there aren’t a lot of empty apartments to choose from in the Valley. Only about 5 percent of the area’s rentals are vacant.

    Salaries are also climbing in the Valley, but not as fast as rents.

    The average rent on a Valley apartment is up almost 8 percent from last year.

    Wages are up 2.4 percent in metro Phoenix, according to the U.S. Bureau of Labor Statistics.

    Developers are upping apartment amenities to draw more people willing to pay higher rents.

    Yoga studios, dog parks and washing stations, coffee bars and resort-like swimming pools are becoming the norm in the Valley’s highest-priced apartments.


  • Scottsdale-based apartment owner Mark-Taylor recently added Amazon Lockers in many of its Valley complexes. The lockers let online-shopping renters pick up their packages anytime.

    Mark-Taylor executive Chris Brozina said the lockers are there to make renters' lives “more convenient.”

    High-end apartment renters pay for the conveniences as well as location. Rents at some new infill complexes in Phoenix, Scottsdale and Tempe can run as high as $2,000 for a one-bedroom.

    In the second half of 2015, before a few new complexes opened up in the area, downtown Phoenix had the highest average apartment rent in the Valley.

    What could make the lives of many renters easier is a lower monthly payment.

    Complexes with more than 10,000 apartments are currently under construction or planned in the Valley. Most are upscale developments in popular neighborhoods.

     

    If there aren’t enough people lining up to lease the many new apartments, then rents could dip.

     

    Ten-X US Multifamily Summer Outlook

    Ten-X’s Latest U.S. Multifamily Market Outlook Reveals Top 5 ‘Buy’ and ‘Sell’ Markets for Apartment Properties

     Full Report Here  

    https://cdn.mlhdocs.com/adc_cms/ten-x/research/pdfs/Ten-XMultifamilySectorReportSummer2016.pdf

    Renovating a Way Out of the Middle Class Housing Crisis


    National Real Estate Investor

    Today, more than ever, middle-class Americans are struggling to find the housing they need.

    Traditionally, the American workforce bought single-family homes in the suburbs, but changes in the economy have driven more people to rent instead of buy. Home ownership has fallen from 69 percent in 2004 to 63.5 percent today, and there are now 116 million people in rental housing, compared to 91 million in 2004.

    Rising demand with a limited supply of apartments leads many Americans to struggle when seeking the right apartment. The need for quality housing that the middle-class can afford has never been greater.

    Rental demand

    Rental demand is being driven by several factors. Today, Americans face many financial challenges. Highly educated people in certain industries are doing well in this economy, but other demographics are struggling.

    America’s workforce makes up about 53 percent of the U.S. population, and for them, times are tough. Finding a good, high-paying job is getting more and more difficult. Over the last decade, the workforce has seen their incomes stay flat or even fall. Today, the median household income is $53,000 a year, which allows just $1,300 a month for housing, using the 30 percent of gross income test.

    That doesn’t go far in most American cities, and the workforce needs to live near growing cities because that’s where the jobs are. They also need to be mobile. Over the last 60 years, the average job tenure fell from nine years to four years. People are changing jobs and moving more often. For these folks, homeownership is a bad choice, and we’re seeing more and more people gravitate toward the flexibility of renting, which allows them to easily pack up and leave.

    However, that’s only half the story. Home ownership is also getting more difficult. Young middle-class people have a lot of student debt—the average student loan debt for someone with a B.A. was $35,000 in 2015, compared to $10,000 in 1993. Even some people who didn’t graduate often carry student debt. With flat incomes and, in many cases, a lot of student debt, many members of the workforce don’t have the best credit scores.

    Since the financial crisis, we’ve seen the mortgage market tighten for those with marginal credit. Today, there are really no mortgages for people with FICO scores under 620. For those with scores in the 620 to 660 range, getting a mortgage is still tough. Since mortgages are hard to get for people with less-than-perfect credit, owning a home is often out of reach. Renting not only makes sense, but is often the only choice for the middle class.

    However, while the workforce needs to be near cities and have the flexibility to move to find work, they mostly don’t want to live right downtown. They have children, and cars, and need access to good schools and suburban amenities. They need quality apartments that they can afford in nice neighborhoods.

    The apartment market

    Unfortunately, the supply of such apartments is very limited. This is partly because construction hasn’t been keeping up with rising demand. In 2000, the U.S. population was 282 million. Today, it’s grown to 323 million. Since 2000, there has been an average of about 150,000 new apartments built every year. This is well below the average of 210,000 new apartments built every year since 1970, and far below the 400,000 that some experts say are needed to meet growing demand and population growth. There are also problems with this new supply.

    If you live in one of America’s growing cities, you may have noticed cranes on the horizon as new luxury apartment communities are built. Today, almost all new multifamily construction is for class-A apartments, which are expensive, luxury apartments that are often built in downtown areas and charge high rents.

    There are two factors driving this phenomenon. The first is high construction costs. According to Rider Levett Bucknall, construction costs have risen almost 40 percent over the last nine years. Land costs are high, and there’s a lack of skilled labor. In general, it’s not profitable for developers to build new apartments that are going to earn less than $2,000 a month in rent. Luxury apartments are the only apartments that make financial sense for developers to build.

    The second factor is zoning. For the most part, thriving suburban neighborhoods do not want new apartments built in their communities. They want to keep their neighborhoods quiet and safe and use zoning density restrictions to keep new apartment communities out. The result of all this is that most new apartments are being built in cities, and charge high rents.

    These new, class-A apartments answer demand from wealthy renters. However, workforce renters are still left without affordable renting options.

    Their only real option is to look at existing apartments. But the last major apartment building booms in the U.S. were in the 1970s and 1980s, so a lot of existing apartments are between 25 and 40 years old. Many of these apartments are in good locations in the suburbs, but they need to be updated and renovated.

    The solution to the affordability crisis for middle-income people in American cities is to renovate these apartments. Smart multifamily investors should find undervalued apartment communities near growing cities and buy them. They should renovate them inside and out, put in new amenities, update the fixtures and turn them into desirable communities. These renovations will make the apartments feel new, but they’re much more affordable than building new construction. The resulting rents in these communities can be significantly lower than in new developments. In other words, through targeted buying and renovation, smart real estate investors can create the updated, high-quality, affordable apartments that the middle class needs.

    Kevin Finkel is the executive vice president of Resource Real Estate (RRE) in Philadelphia, a value-add real estate investment firm which buys, remodel, and sells distressed buildings. Kevin also serves as senior vice president for Resource America and as president and chief operating officer for Resource Real Estate Opportunity REIT and Resource Real Estate Opportunity REIT II.

    PHOENIX Q2 2016 APARTMENT REPORT


    The Metro Phoenix multifamily sector capped off Q2 2016 with a slight increase in vacancy, rising from 5.4% in Q1 2016 to 6.0% at the end of the second quarter. Aside from the Central Phoenix Submarket (6.8%), all submarkets experienced a rise in vacancy with Tempe recording the largest gain, climbing from 5.5% to 8.1% quarter-over quarter. This increase can be attributed to the majority of Arizona State University students vacating in May. Even with this minor ascent in vacancy, the multifamily market continues to show signs of improvement year-over-year, beating the vacancy rate of 6.2% that was in place 12 months ago.

    Second quarter absorption followed the same trend, as vacancy posted a negative absorption of 492-units for the Metro Phoenix market. Again, the majority of the negative absorption is due to the 611-units that were vacated in the Tempe submarket this quarter. Arizona State University’s Tempe campus undergrad enrollment improved by ±1,900 students from 2015 to 2016. As more tenants/students are signing nine month leases that coincide with the school year, seasonal occupancy has become increasingly volatile for this college based submarket. This could be the main
    contributing factor as to why there was an escalation in negative absorption of 296-units from Q2 2015 to Q2 2016. 

    The Central Phoenix (292-units) and East Phoenix (131-units) submarkets recorded the highest levels of net gains in the second quarter. Even though absorption posted negative net gains for Q2 2016, the average asking rent per unit still continued to climb, jumping 2.3% from $900 in Q1 2016 to $921 at the end of the second quarter. This marks the ninth straight quarter in which average asking rent per unit has increased. The Central Phoenix ($1,065 per unit) and West Phoenix ($691 per unit) submarkets logged the greatest gains over this quarter,increasing 3.8% and 3.6%, respectively.

    The multifamily sector posted yet another quarter of strong development bringing the year-to-date total count to over 3,200 new units for the year. The bulk of these new Completions came from the Central Phoenix (514-units), Scottsdale (566-units) and Tempe (484-units) submarkets. We are currently tracking 5,924-units under construction and an additional 17,874-units planned for development. The Central Phoenix submarket tops current under construction totals with 2,062-units, while the Chandler/Queen Creek submarket currently has the most units planned at just over 3,600-units.

    Yardi Phoenix Summer 2016 Apartment Report

    Valley of the Sun Continues to Heat Up


    Phoenix’s multifamily market is on a roll as a consequence of its strong job market amid a population influx unlike any other in the Southwest. Rents rose an impressive 7.3% year-over-year through June, although the metro remains inexpensive compared to the national average. Property values have gone up as well, although investors continue to be bullish on a market where the cost of entry is still relatively affordable. 

    While heavily reliant on trade, transportation, education and health services, the metro has succeeded in diversifying its economy in recent years. Efforts made to attract tech companies from the neighboring state of California have pushed employment in the sector to all-time highs; in fact, the phrase “Silicon Desert” is slowly catching on in the Scottsdale and Tempe submarkets. As a result, rents in upper-tier assets have mostly managed to keep up with those of assets for working-class households. 

    Development is starting to pick up again. With occupancies at the 96.0% level, the pipeline has reached more than 40,000 units. Supply is concentrated in the metro’s Central and Eastern submarkets, where most of the rent growth is occurring. We expect that continued population growth and job creation will keep occupancy rates up even as completions rise, though the supply pipeline will serve to moderate rent growth to 5.4% in 2016.

    FULL REPORT HERE   

    https://www.yardimatrix.com/Media/Downloads/File/102-Phoenix-Summer2016Outlook?signup=false

    Hello world!

    Welcome to your blog. This is your first post. Edit or delete it, then start blogging!

    KW Phoenix Apartment Group

    15333 N Pima Rd., Suite 130

    Scottsdale, AZ 85260

    T 623.466.5849

    F 480.629.5105

    germain@kwcommercial.com

    Follow Us On: