A local housing analyst said Valley rents have increased about 23% year-over-year since 2021 as some tenants continue to see lease costs climb.
According to Thomas Brophy, housing analyst at Colliers in Phoenix, the increase factors in the average rent of all multifamily units regardless of whether its one- or two-bedroom units.
A new report from Apartment List says rents in Phoenix increased 0.4% month-over-month in February, compared with a 0.6% decrease nationally with median rent and price growth data Month-over-month growth in Phoenix ranks No. 56 among the nation’s 100 largest cities, the report said.
“Year-over-year rent growth in Phoenix currently stands at 26.7%, compared to 4.8% at this time last year. Year-over-year growth in Phoenix ranks No. 9 among the nation’s 100 largest cities. Rents in Phoenix are up by 32.3% since the start of the pandemic in March 2020,” the report said.
According to Realtor.com, Phoenix recently ranked No. 10 for monthly rental increases.
A 2019 report on Housing and Urban Development’s Fair Market Rents in Arizona reported the cost of a two-bedroom apartment is $1,097. To afford this rent, as well as utilities, a household would need to earn $43,892 annually, or an hourly wage of $21.10 — more than $9 above the state’s current minimum wage.
The average cost of Valley rent with all multifamily units included is now $1,601 per month with the latest numbers, Brophy said.
But Brophy said to be cautious of some data sets that look at short windows such as a month time frame.
He said quarterly reports could provide additional insight sometimes not visable in a short span.
“It’s one way to look at it,” Brophy said. “But sometimes good data takes time.”
Price determinations set by property managers are done a differently as some Valley renters may have to search for places to live more often than current homeowners.
According to the Arizona Department of Housing, an estimated 250,000 to 270,000 new housing units of “all types” are needed statewide to meet current demand.
For instance, Brophy said, property managers can use computer software to determine prices of specific leased units based on the current supply of total units in the community.
“Because (the) systems are automated, it allows (property managers) to make quicker reactions to changes in the market as they happen,” Brophy said.
But he said real-time numbers could suggest turmoil that may not yet exist.
“The grander view is not as chaotic as the real-time data might suggest,” Brophy said. “(It’s like) where the telescope ends and the microscope begins. Which of the two has the grander view? That’s kind of where we are at with data.”
Kristin Miller, a property manager for a Peoria neighborhood rental property, said new residents can expect to pay a higher monthly costs because they are paying the unit’s market value. By comparison, a current resident who simply extends their current lease would typically pay less.
“Residents who are here will get preferred pricing,” Miller said. “We don’t want to push residents out — it’s never our goal. We just have to keep it comparable to what the market is driving.”
Miller, who has been in the industry 17 years, said property managers previously relied on manual pricing, which shows activity of all the comparable properties in the area.
Now, she said managers can use lease revenue software, which helps to determine real-time data.
Miller said job growth in Arizona including the Taiwan Semiconductor Manufacturing Co. announcement in March 2021 has driven prices in the current market.
She said industry officials knew about housing concerns two to three years ago.
“We knew this was coming,” she said.
Brent Ruffner Lead News Reporter | Phoenix @AzNewsmedia
Brent Ruffner joined Independent Newsmedia, Inc., USA, in 2021 where he writes about developments at TSMC and Maricopa County issues, including election topics.
He's written about stories that range from accusations that a Mesa monkey breeding facility is unsafe to what to do if you encounter a rattlesnake in the desert.
Community: He is a supporter of the American Cancer Society.
Education: Bachelor's degree in Journalism and Mass Communication, Arizona State University, May 2007.
Random Fact: He met former San Francisco Giants outfielder Willie Mays at a Phoenix Firebird game after winning a contest for an autographed baseball.
Hobbies: Hiking in the woods and collecting sports memorabilia.
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