Scottsdale, Mesa, Glendale, and Phoenix are among the top US cities to see significant rent increases over the past year.
SCOTTSDALE, Ariz. — Several cities in Arizona are among the nation’s top locations for rising rents the fastest.
A report by Apartment List found that six Arizona cities, all in the Valley, saw their rents increase by more than 25% in the past year alone.
Rising rents in Arizona
Nicole Terrell, who is a real estate agent and tenant in the Valley, has seen the rent for the house she rents go up by about $600 a month.
“We’re starting our new lease and it’s right at almost $3,000,” Terrell said.
The limited options available, as well as the higher costs of deposits needed to move into a new location, are just some of the changes she has seen in the market for her, Terrell’s friends and her clients.
“Hard to get in and they’ve definitely gone silly,” Terrell said. “Because you won’t get your money’s worth.”
In the Apartment List report, Scottsdale came in only behind New York and Tampa, Fla., as the nation’s top cities for rent increases. Scottsdale saw rents increase by 31.1% from January 2021 to January 2022.
Mesa, Phoenix, Glendale, Chandler and Gilbert were also in the top 20 cities with the fastest growing rents in the country, as part of the Apartment List report.
“Rent prices just skyrocketed pretty much across the country,” said Rob Warnock, senior research associate at Apartment List.
More demand and less supply
Warnock said he and his colleagues found that 2021 had higher rent increases than pre-pandemic levels.
“We’ve seen rent prices go up 20, sometimes 30%, in the last year alone,” Warnock said.
Increases were particularly noted in the country’s Sun Belt, Warnock said. Places like Florida, Texas, and Arizona are places people want to live and have benefits like lower cost of living and better weather.
“The things that made Arizona attractive as a place to live all became very important during the pandemic type of time,” Warnock added.
Warnock said that among apartments listed on the City of Phoenix Apartment List, vacancy rates hit just over 3% in June 2021. Vacancy rates have been rising since then.
“Year-over-year figures, far fewer vacancies today than a year ago. down a bit,” Warnock said.
With vacancy rates so low, Danny Court, chief and senior economist at Elliot D. Pollack & Company, said more housing is needed.
“Even in the face of this incredible demand, we are unable to build these units,” Court said. “Even if we wanted to, there’s just a capacity limit to how many units we can deliver each year.”
Court said developers face issues including long processing times with municipalities, difficulty finding land zoned for housing, supply chain disruptions and labor shortages work.
“We see a shortage of all types of housing: owners, renters – in all areas. So it’s luxury housing, market price housing, labor housing and in this subsidized category of low or very low income housing,” the court said. noted. “It requires public investment to be able to make them work.”
Rent this year?
Court and Warnock expect rents to continue to rise, but not as sharply as in 2021.
“They have to be prepared for this thing that they don’t want to hear,” Warnock said. “That is, the rent will go up.”
The Court noted that the rise in rents is still “very high” for what Arizona normally sees.
“Base rent is so high right now that the expectation for this year is between 7% and 10%,” Court said.
Knowing that many people will see their leases expire this year, Warnock and Court said to consider the options available and choose carefully.
“You need to secure that next place of residence before you consider jumping or balking at that new rental rate,” Court said. “It’s going to be difficult for a while.”
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