Research & Forecast Report
Phoenix MSA Q1 2020 Multifamily Review Pre-Covid Wrap-up
While nearly every aspect of life has changed since March 1st of
With that said, the Phoenix MSA continued to lead the nation in
this year, it is necessary to take stock of where the market was
rent growth rising 8.1 percent y/y to $1,235, nearly three times
prior to the Covid-19 shock knowing that all previous data sets
higher growth rate than the National average of 2.9 percent but
relied upon have changed. As Elliott Pollack so eloquently stated
still well below National average rent of $1,475. Occupancy rates
in his ‘The Monday Morning Quarterback,’ 4/6/2020 post:
continue to remain elevated at 95.1 percent despite decreasing
You shouldn’t be concerned with how bad things look right now. Current events are like nothing in modern history. The
40bps over-the-year and marks the 33rd consecutive quarter occupancy has been above the 20-year average of 91.6 percent.
unprecedented slide in the economy has nothing to do with
Approximately 1,400 units came online over Q1 2020 which is
normal economic cycles. It is due to a reaction to COVID-19 that
below the 2,000 unit moving 3-year delivery average. Given the
will be transitory. In addition, the CARES Act just passed by
current construction rate, 2020 should prove to be the highest
congress is not a stimulus package. It is a disaster relief package.
delivery amount since 2009’s 9,315-units. There are approximately
It is specifically designed to get income primarily to those whose
18,772 units currently under construction throughout Greater
income has been cut due to COVID-19 and its fallout (although
Phoenix, the highest amount since Q1 2018’s 17,895, and marked
every adult American with an income of less than $99,000
the 24th consecutive quarter where the number of units under
will get some cash). Though not perfect, it is a well-designed
construction was above 10,000.
program that should keep cash flowing to those who lost their income source.
Investment sales volume decreased 37 percent over-the-year to $1.18B across 28 transactions with average PPU (Price Per Unit) increasing nearly 28 percent to $189,185.