Phoenix, AZ -- ABI Multifamily, a dedicated multifamily brokerage and advisory services firm, announced the release of the Phoenix MSA’s Year End 2015 Multifamily Market Report.
“The Phoenix Metro multifamily market surpassed $3.8 billion in total sales volume, up 34% y-o-y and almost 265% since 2010’s haul of just over $1 billion in sales volume” states Thomas M. Brophy, Director of Research at ABI. “As you track the Phoenix market’s trajectory since 2010, huge gains have been made in the multifamily market as an asset class. As both the report, and imbedded chart, reference, vacancy rate has dropped to an all-time low of 5.2%, which in historical perspective is some 5%+ below normal operating conditions. Additionally, average effective rents have increased nearly 25% over the same time period.”
Mr. Brophy goes on to state, “there are multiple forces at play fueling the multifamily fire which include:
(1) Population Growth: Although lower by historical standards which trend 10%+, the Phoenix Metro has grown nearly 7% to 4,474,800 gaining approximately 282,000 persons.
(2) Even more fundamental than population growth has been the absolute explosion of the ‘Renter Household’ since 2005. From 2005 to 2013, Renter Household formation skyrocketed 34%, which if current population estimates hold true we’re now closer to 45%, this impacts over 175,000 households representing a combined population of approx. 450,000 persons.
(3) The “For Sale” single-family home market, which still hasn’t fully recovered from the 2007/08 Great Recession, combined with ongoing negative impacts of TRID/RESPLA, should continue to fuel the multifamily asset class as more people need to rent.
(4)Job Growth: Especially in Downtown CBD’s, i.e. Downtown Phoenix, Old Town Scottsdale and Tempe, have witnessed 10,000+ job announcements (many of which pay $45,000+ per year), corporate relocations and aggressive courting by economic development officials.
To read/download the full report go here.