Rental market in the Valley cools down as the demand for apartment complexes goes up
PHOENIX (3TV/CBS 5) - If you rent, then you already know that prices have skyrocketed over the last year by hundreds of dollars. But there is some good news, with recent reports showing the rental market may be stabilizing.
There are plenty of anecdotes from Valley families who’ve had to scramble to find another place to live to avoid mega rent increases. Zillow’s new August Housing Report shows there are some parallels in the Valley’s housing and rental market: a cool down.
The average rent price in Phoenix was $1,921 in July. That’s five dollars cheaper than June. While not significant, Zillow senior economist Nicole Bachaud says this signals stabilization after soaring prices.
“So we saw a lot of demand going to these places, and now we’re seeing the rents start to stabilize and even coming down in Phoenix. So that rent growth has really flattened out from where it was because we saw this push of all these folks coming into the market, and now that’s cooling off a little bit,” she said.
Bachaud doesn’t anticipate rent to go back down to pre-pandemic levels because more would-be first-time homebuyers are staying in their rentals longer since they’re still priced out of the housing market. Which in turn, keeps rental demand steady.
“We’re expecting longer-term rents to stay elevated because we have all of these folks who don’t have the ability to buy right now. But they need somewhere to live, so they’re likely to stick around in the rental market,” Bachaud said.
Economists say the big picture is a correction after the pandemic put a big squeeze on demand. Bachaud says there has been an increase in permits for multi-family homes, like apartment complexes, so that’ll help demand.
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