Analyzing Apartment Performance in Phoenix’s Highest Supply Neighborhoods

The Phoenix apartment market has been growing at one of the fastest paces in the nation, adding an incredible 22,800 units over the past year alone. And it’s not just the last year that supply has been elevated.

Apartment inventory in Phoenix has grown by 18.8% in the last five years, according to data from RealPage Market Analytics. A handful of submarkets within Phoenix, however, stand head and shoulders above that growth rate. Of the 23 submarkets in Phoenix, seven have grown total inventory above the market average during that time period.

Topping this list is the Avondale/Goodyear/West Glendale submarket, where inventory has nearly doubled in the last five years, growing almost 94% since 3rd quarter 2019. And what’s more – this submarket will grow by another 35% in the coming year. Avondale/Goodyear/West Glendale is the largest submarket in Phoenix with nearly 40,000 existing units, primarily of Class B stock. Rents here are in line with the market average of $1,551 as of 3rd quarter 2024. Under pressure from so much new supply, occupancy here was lower than usual in 3rd quarter at 92.1%, and effective asking rent cuts were deeper than the market average of 4.2%. As such, concession usage – both as a percentage of asking rent and as a percent of units offering concessions – ran higher than the Phoenix market average.

Central Phoenix, which encompasses the market’s urban core, is predominantly Class A stock and, as such, has one of the higher effective asking rents in the market. Monthly rents here average $1,783, the third highest in the market after North and South Scottsdale. Occupancy in Central Phoenix during 3rrd quarter registered at one of the lower rates in the market at 92%. Concession usage – both average days free and ratio of units offering a concession – ran higher than the Phoenix average.

Gilbert, Peoria/Sun City/Surprise, East Mesa and Deer Valley have a number of things in common. In addition to high supply volumes recently, these submarkets are of relatively similar size – all roughly 17,000 to 22,000 total existing units of predominantly Class B stock. Prices here are uniform, all averaging rents slightly higher than the market average. They also all have relatively similar delivery volumes expected in the coming year.

Pinal County is somewhat of an outlier on this list for a couple reasons. It is Phoenix’s smallest submarket with about 8,000 existing units, making a large delivery load even more noteworthy. Stock here is predominantly Class C units and, as such, rents are some of the lowest in the market, averaging $1,299 per month. Performance was soft across most metrics in 3rd quarter, as Pinal County claimed the lowest occupancy in Phoenix at just 88.7%. Similarly, annual rent cuts in Pinal County were the deepest in the market at 6.5%. (Though all of Phoenix’s 23 submarkets were cutting rents as of 3rd quarter 2024.) With so many new units in lease up, it also makes sense to see the market’s highest percent of units offering concessions in Pinal County at nearly 57% – well above the already-high market average of 40.9%.

Looking ahead in these submarkets, rent cuts are expected through 2025 in Pinal County and Avondale/Goodyear/West Glendale, though the remaining high-supply submarkets are forecasted to begin registering minimal or modest growth slowly in the coming year, much like the Phoenix market at large.