According to a recent report, the Valley is one of just two markets across the country where rents for single-family houses have decreased.
Both Phoenix and Las Vegas reported a monthly drop in rents for single-family homes of -0.2%, according to the CoreLogic Single-Family Rent Index published on May 16th.
According to the S&P CoreLogic Case-Shiller Indexes, metro Phoenix experienced a similar decline in home prices in February. The home price growth was down 2.1% year-over-year. This was the first time metro Phoenix had dipped below the 1% mark in home price growth since the Great Recession.
Rents for single-family homes continued to increase nationwide, but growth was down to just 4.3% in march, the 11th consecutive month that rents were lower than the previous year. Phoenix and Las Vegas, however, were the only single-family rental markets to experience rent declines.
According to CoreLogic's Single-Family Rent Index, the median rent for a single-family house in metro Phoenix in February was $2,361.
Molly Boesel is the principal economist of CoreLogic. She released the latest data and stated that the growth rate for single-family rent prices continued to be slower than it was a year ago. The slowdown is most pronounced at the top end of the market, where the growth rate is about the same as before the pandemic. The gains in the lower price tier, however, are still double the rate of pre-pandemic, with all monitored metro areas reporting increases at this level.
Charlotte, North Carolina, topped the list in March with an annual rent price increase of 7.7%.
Rent construction continues in the Valley
Rents are declining in metro Phoenix at a time that developers are building more rental communities.
Family Development, a California-based company based in Palm Desert, has partnered up with BFL Construction for the construction of two luxury communities to be leased out in West Valley.
Villas Litchfield park and Villas Goodyear, currently under construction, are expected to be completed in mid-2025.
BB Living has recently opened a new rental community in North Phoenix, which includes detached homes and townshomes, with rents starting as low as $2,635.
Mark-Taylor Residential is managing the luxury community BB Living at Union Park.
Many developers are also building rental communities in the Valley. This includes Valtus Capital Group of Las Vegas, which has created a private equity group for real estate to build 1,000 detached units and traditional apartments in Arizona.
Colliers International reports that approximately 12,100 units for rent are currently under construction and another 5,700 in various stages of planning.
Thomas Brophy is the research director at Colliers International. He said that there are currently 8,200 rental homes available. The average occupancy rate of these communities is 94.4%.