By Mike Bodeen · 19 September 2022
Today’s Phoenix Business Journal published an article with a truly unbelievable headline proclaiming that the median rent in Phoenix grew by nearly 46% this past year.
The article further reported that the Phoenix area’s median rent was $2350 in August, and that Phoenix area renters paid $736 more than they did a year ago. Nationally the Valley ranks 38th in a list of the most expensive rental cities in the U.S. Yes, you read it correctly. Read the article here.
The other amazing part of this article was that Tucson’s rent “surged” by 124%. Tucson renters are now paying $1,096 more for a rental now averaging $1980.
The company providing these numbers is a company called Dwellsy, located in Silicon Valley, which appears to be a national rental service.
Phoenix and Tucson are not alone. Kansas City, MO and Anderson, S. Carolina also had more than 100% rent price increases.
“This may further exacerbate the lower amount of home buying inventory available…It has the potential of further increasing home sales prices.”
The three most expensive metro areas for single family homes were all in California: San Jose, Salinas and Santa Barbara with a median average rental price of $3,600+-. For apartments, the most expensive city was New York. Phoenix was not in the top 10 for median apartment prices.
Phoenix area builders have nearly 10,000 build-to-rent units under construction. These units will help renters, but it won’t be enough.
Whereas these build-to-rent communities are helpful, there is a downside. Many homes that would have been built for prospective homeowners to purchase are now being built to go into the rental market pool. This may further exacerbate the lower amount of home buying inventory available in the months and years ahead. It has the potential of further increasing home sales prices.
We are currently in a slowing sales cycle, due mostly to high mortgage rates, but this will change.