By Mike Bodeen · 3 July 2023
Phoenix Metro 10 Year Rental Price History
First off, have a wonderful 4th of July celebration for this, the greatest country in the world – still!
Last week on The Snapshot we asked the question, what would you call lower and middle class Americans who are not able to buy a house due to the prohibitive cost? One thought that came to my mind, was “renters forever.”
That is a tragedy. Not being able to “buy” a home is a tragedy. Sky rocketing rents are a tragedy. How did we get here is a question for another Snapshot, but not this day.
What we will track today is the appreciation of rental prices over the past 10 years. What we do know, is that during Covid there was a monumental spike in rent pricing in the Valley such as has never happened, at least that I’m aware of. Since I haven’t seen the following stats reported anywhere, I hope the chart below should help prove my point. As usual, thanks to the Cromford Report for obtaining these numbers:
Annual Average Rent Growth Going Back Eight Years
July Rent Price Per Square Foot (PSF) Phoenix Metro Residential MLS
Year | $ Price PSF | Change | 2000 SqFt Home Rent Price
2013 | .70 | — | $1,400
2014 | .75 | +7% | $1,500
2015 | .81 | +8% | $1,620
2016 | .85 | +5% | $1,700
2017 | .89 | +5% | $1,780
2018 | .94 | +6% | $1,880
2019 | 1.01 | +7% | $2,020
2020 | 1.10 | +9% | $2,200
2021 | 1.33 | +21% | $2,660
2022 | 1.37 | +03% | $2,740
2023 | 1.37 | No Change | $2,740
Rental Price Change in (10) years = $1340: Up 96%. Annual Increase of $134 PSF.
Prior to 2013, the Phoenix Metro rental market was mediocre at best, but affordable, for sure, averaging around .70 to .73 cents PSF going all the way back to the year 2001.
2013 began a steady increase of rental prices in Phoenix. Just like with residential home appreciation, the highest rental price increase happened in 2020-21. This coincided with the eruption of the Covid 19 pandemic. 2022 then began a reversal of price increases – both sales and rentals.
There are currently many thousands of homes under construction or planning to be built in the next year specifically to rent. Could this reduce rental prices? I don’t think so. The demand for housing is too great. This may help keep the increase of rents at bay, though I wouldn’t bet on the drop.
Though this sounds awfully self-serving, once again, if at all possible, whatever it takes, get into a home of your own.
Market data referenced in this article comes from The Cromford Report.