Apartment demand in Phoenix was very strong in 2023, but even solid absorption couldn’t keep up with supply, resulting in rent cuts across all submarkets. Phoenix logged demand for a stunning 12,000 apartments in 2023, which turned out to be the biggest absorption tally the market has seen since calendar 2000 – excluding the COVID-19 boom of 2021. This was the nation’s second-best demand tally in 2023, behind only Houston. Still, supply in Phoenix was more significant at 17,000 units in 2023. As a result, occupancy as come down from recent highs, landing at just 92.6% in January. That is the lowest occupancy reading Pheonix has seen since January 2014. But with occupancy weak across the market, rents cuts were recorded in all submarkets in February, even in areas with low or no recent supply like South Glendale, Northwest Phoenix and West Phoenix.
For more information on the state of apartment market in Phoenix, and in other markets across the Desert/Mountains region, including forecasts, watch the webcast Market Intelligence: Q1 Desert Mountains Update.
