In this article we will be discussing the Phoenix Multifamily Outlook for 2022. Since the pandemic began to take a toll on global markets in January 2020, Phoenix was one of the few markets that began to recover quickly with mass in-migration, job expansion, and household formation.
As of December 2021, Phoenix had officially surpassed the pre-covid market levels of rental rates, occupancy levels, absorption, and asset values. 2021 was an incredible year for the Multifamily Sector. According to Yardi Matrix, “Phoenix rents have increased over 25% YoY”, which is one of the highest year over year growth rates in decades.
Marcus and Millichap released their 2022 Market Outlook Report, and stated, “The Phoenix Market is projected to add 50,000 households this year, growing at a pace more than twice as fast as the national average”. Marcus and Millichap also expects rents to increase 7.2% in 2022 which is the 2016-2020 annual national average. They also project employment levels to increase 3.9% in 2022, adding over 88,000 jobs which exceeds the ‘pre-covid’ rate by 137,400 positions.
We remain bullish on the Multifamily Sector in Phoenix, AZ. Apartment fundamentals remain strong due to mass in-migration, job expansion, household formation, and rising inflation. Although we do not expect to have unprecedented growth rates like 2021, we do expect the market to continue strong, and to begin stabilizing as new completions arrive on the market in 2022.
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