04 Jun Phoenix renters finally seeing better deals, thanks to the many new apartment complexes
What is the average rent paid by Phoenix-Metro residents? Wochit
Renters looking to move into one of metro Phoenix’s new, deluxe apartments could be in for a pleasant surprise.
Many of the Valley’s newest rental complexes are offering renters deals to help them fill vacancies before other new apartments under construction open and lure them away.
Phoenix ranks ninth among big U.S. cities for the most apartment concessions currently being offered, according to a new report.
Greg Willett, RealPage’s chief economist, said it’s typical for renters to get about three weeks of free rent now at new Valley apartments.
That’s a discount of about 6.3 percent on a lease, according to the national apartment research firm.
Atlanta leads the nation for the most apartment concessions now with about a 9.1 percent rebate on a year-long lease. But the Georgia city has had more apartment construction than the Valley so far.
Apartment building boom
About 21,500 new apartments, mostly in central Phoenix, south Scottsdale and Tempe, have gone up since 2015, according to RealFacts.
That compares to 33,700 in Atlanta.
Metro Phoenix’s apartment building spree is far from over. About 17,900 apartments are under construction or planned in the Valley now, according to Phoenix-based ABI Multifamily.
That list includes a new 329-unit complex to go up on a central Phoenix block where almost 20 old homes will be demolished to make way for it.
Despite the Valley’s many new apartments, the area’s vacancy rate hasn’t shot up and is hovering around 5 percent, according to several apartment researchers. Metro Phoenix’s strong population growth is a big reason why.
Relocation, relocation, relocation
About 69 percent of recent renters in metro Phoenix came to the Valley because they felt more likely to find a job and afford an apartment here than other big U.S. cities.
A new survey from national firm Apartment List tracked "location-first movers" who search apartments in multiple cities away from their hometown and pick the place where they have the best chance to find a job.
Phoenix tied with Portland to rank second on a list of the top large U.S. cities for location-first movers. Las Vegas was No. 1.
The other group tracked, "jobs-first" renters, typically move to more expensive cities when they already have a job.
More people are definitely moving to the Valley. Last year, Maricopa County led the nation for population growth by drawing 74,000 new residents, according to the U.S. Census. That’s about a 1.7 percent jump from 2016.
Jobs drew many new Valley residents. Phoenix-area job growth climbed 2.7 percent last year, with 54,000 jobs added.
Population and job growth are driving apartment developers, but concessions and slower rent increases show builders may be a bit ahead of those two key indicators.
Goodbye to rent spikes?
After a few years of heady rent increases, Valley apartment costs are dipping, flattening out or at least not climbing nearly as fast.
Overall, the average metro Phoenix rent climbed about 6 percent last year. That came on the heels of increases of 8 percent or more in many parts of the Valley during 2015-16.
This year, some apartment researchers are calling for the Valley’s average rent increases to slow again. Peoria, Surprise, Gilbert and Chandler, where apartment development has lagged compared to other parts of metro Phoenix, could see the biggest rent increases.
Rents have already dipped a bit in parts of central Phoenix and Scottsdale this year, particularly when concessions are added in.
With concessions and the many new apartment projects still underway in those parts of the Valley, renters should be able to find better deals this summer.