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Rent Prices Take Off In Phoenix

market research phoenix Jan 12, 2021

Eight cities in the Phoenix metro ended up on this year's national list of cities with the highest rent jumps. Five of these cities are in the West Valley. This list looked at average rents including both apartments and rental homes; anything from a studio to a 3-bed unit. 

To put things in perspective, this study found that the average rent increase for the 500+ cities analyzed was only 0.5% from 2019 to Nov 2020. The three metros that represented almost all of the top 25 were Phoenix, Las Vegas, and Atlanta.

Cities With The Highest Rent Increases

Avondale was at the very top of this list with the largest rent increase nationwide @ 14.3%. The average weighted rent in 2019 was $1,384 which increased to $1,517 by November 2020.

Next on the list is Suprise, which came in at 6th place. Surprise, AZ had an average rent in 2019 of $1,519 which grew by 11.4% and is up to $1,635 as of November.

Glendale notched in at the 11th place spot with 10.4% rent increase. Same time frames as the rest. Glendale, AZ had a weighted average of $1,199 in 2019 which grew to $1,279 in 2020.

Peoria, AZ ranked #21 on the top 100 list. Starting rents in 2019 was $1,469 and grew to $1,557 for a total of a 9.1% increase.

A little bit later on the list but still in the top 100, Phoenix showed up taking 68th place. Phoenix rents in 2019 averaged at $1,177 and rose by 6.4% up to $1,225 by November 2020.

On the other side of Phoenix, Mesa and ranked 26th with a rent increase of 8.9%. Average rents in 2019 were $1,288 and rose to $1,357 by 2020.

Also at 8.9% and coming in at 27th place was Gilbert. The weighted avg in Gilbert was $1,675 in 2019. A year later, they've reached $1,771.

Chandler ranked #71 on AdvisorSmith's list with an average rental increase from 2019 to 2020 of 6.3%. Rents were listed at an average of $1,576 in 2019 and by November 2020 rose to $1,637

Source and Methodology: Cities Where Rents Are Rising and Falling the Most

When's The Best Time To Buy Multifamily?

This is such a common question any respected real estate professional gets asked in their market. When is the right time to buy? The Fourplex Investment Group team doesn't just develop and sell real estate, we are active investors ourselves. In our experience, we've come to learn that the more important question is actually “Where” is the right place to buy, not always “When”.

Are you in real estate to speculate on short-term horizons? If so, our advice is likely not for you. FIG has a very extensive background in the industry and as a whole, we've become very strong advocates of the long-term power of real estate.

When you look at real estate investments with at least a 5-10 year horizon in mind, the “get rich quick” concepts of real estate often lead to crooked expectations and crashes. Mistakes like these can ruin your entire portfolio or at least greatly delay it's potential.

While there are definitely great “flippers” in the market, we prefer to create the kinds of deals within the market that allow our assets to go to work and pay us while we sleep. These are typically the deals that compound over time. Doing the right homework on where you're wanting to invest and you'll be led to wiser strategic action. When the numbers make sense on paper, they almost always translate to a safer and reliable investing vehicle.

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