The Phoenix metro rental market continues a two-year ascent, showing no signs of stopping anytime soon. What really could be the reason behind the increasing demand for rental property in Phoenix?
According to Stephanie McCleskey who is the vice president of Research for Axiometricks, outstanding job growth is the most important factor. McCleskey asserts that with over 3% annual Phoenix job growth rate, the huge demand for accommodation is consuming a huge portion of new property supply.
According to his organization, Phoenix businesses created 56,800 in 2015. The data provides evidence that real estate companies are in a rush to add another 4612 housing units in 2017, after supplying 7093 units in 2016. Looking at 18 submarkets with over 1000 units, the 2016 data ranked the valley cities with the most growth as follows;
- South Glendale—11.0%
- South Mesa—9.1%
- Sunny Slope—8.2%
- East Mesa—7.9%
- North Glendale/Peoria—7.3%
Despite mortgage rates currently being at their historic lows, Phoenix remains one of the most promising property markets across the nation. The cost of rent has gone higher for the 23 of the past 24 months so is the apartment occupancy.
Nathan Pierce—principal at Strong Tower Realty in Scottsdale advises tenants to consider low or no down payment programs and acquire homes rather than rent. He believes that renters are spending more than they would on a mortgage payment. “In our market, you could save 25% by buying a house outright instead of renting,” says Nathan. He goes ahead to point out that people are spending more when they sign a lease and they are missing out on tax breaks like interests, property tax as well as mortgage insurance by not choosing property acquisition over rental.