By Mike Bodeen · 2 February 2024
…Looong time passing?
Ok, some of you, admit it, you started to sing the 60’s epic song as soon as you saw the title, right? Here’s the Kingston Trio video version. Kleenex, please.
Onward.
There are estimates of 270,000 housing units (Arizona Department of Housing) needed to satisfy the demand for housing in Arizona, with most all of that being in Maricopa County. So, I ask myself the question that is our subject this week. Where are these 270,000 residents currently living? Read the article here.
Granted, many or most of them may be living with family or friends, but that’s a lot of shared housing.
We’ve also been seeing, however, a leveling off in rent pricing. (See chart below) This generally means there’s too much supply for the demand. With over a quarter million housing units needed, I would be expecting rents to surge, unless of course, landlords asking prices are outside what the market will bear – that prices are too high.
Renters are finding alternative places to crash each night and will continue to do so until rents or ownership becomes affordably palatable.
Locally, we’ve seen a drop in the rental lease price per square foot (psf) for the past 5 months, from $1.43 PSF to $1.31 PSF within the Arizona Regional Multiple Listing Service (ARMLS). This does not include vacation rentals, but mostly long term.
This is important. Our local and state governments are now in the process of making long term decisions about trying to cure the housing problem and if our estimates of needed housing are off, we’ll be making decisions with faulty data.
It’s my understanding that a new local study will look more closely at this important question of our housing supply. I personally subscribe to the need for more housing in Phoenix Metro, but I’d sure feel better if the baseline question of supply and demand were accurately assessed to current numbers.
By the way, and along these lines, for those of you real estate info geeks out there (hello Mike York) you’ll find this Harvard study on America’s rental housing situation interesting. For the rest of you sleep deprived ones, read it at bedtime. Sure to cure! Read the article here.