Although the Phoenix Multifamily market has fluctuated considerably over the past few years, the long-term drivers supporting the Valley’s multifamily market remain in place. Nation-leading demographic patterns, a growing and diversifying economy, and an attractive quality of life continue to stoke underlying housing demand.
About $1.2 billion traded in 23Q3, marking the first time a quarter didn’t have less sales volume than its predecessor in over a year. Though it’s an improvement, sales activity remains well below levels seen over the past half-decade as elevated debt costs, tighter underwriting standards and lower rent growth projections make it difficult for deals to pencil. The resulting period of price discovery has led to an increase in average cap rates of 150 basis points from their recent all-time low, negatively impacting values. Newly delivered assets by merchant developers and those facing loan maturity may be a source of deal flow over the near term. Want to know more? Keep reading below!