AIM Insight | August 2018

Phoenix Multi-Family Market Report

Welcome to AIM Insight!  An opportunity for us to keep you updated on some of our latest projects
as well as current ideas, tips and trends within the multi-family property industry.

Recent Vacancy Trends for Owners & Buyers

Phoenix Multi-Family Market

Single Family Homes. First time buyers are looking at only 17% of homes for sale in the Phoenix metro area that fall into their price range. Investors are their main competition and already own more than 250,000 homes to rent.  What does this mean?  The lack of inventory to first time buyers will drive more people to rent according to a recent Zillow Group Inc. report.

Labor Costs. There is a construction workforce shortage and makes it difficult to build units at a rapid pace.  In January of 2008 there were 207,000 construction workers.  There were 156,000 workers as of May 2018 according to the U.S. Bureau of Labor Statistics.

Population Growth. Maricopa County grew by 1.7% in 2017. That’s 74,000 people.

Employment. Arizona unemployment rate was 4.7% in May 2018. Phoenix area unemployment rate for the same period was 3.4%.  This indicates a strong economy in Arizona as well as the Phoenix area.

vacancy-rate-report-phoenix-multi-family-august-2018

Vacancy Rates.  Apartments on average in the Phoenix area, are seeing high occupancy rates.  First quarter of 2018 the vacancy rate average is 5.1% and compares to 6.2% a year ago.

Mortgage Rates. The benchmark rate keeps rising and banks keep pace by increasing mortgage rates.  The continued rise in rates will discourage potential home buyers.

Material Costs. Higher material costs are causing building projects to become more expensive.  Lumber prices are hitting their highest levels in years due to lack of supply and trade disputes with Canada over timber pricing.  Lumber pricing over the past year have roughly doubled.
The result of these factors and others, according to the Phoenix Business Journal recently hosted roundtable of multifamily industry experts.  The main topic of the roundtable was if the Phoenix area was over building as it did in 2004.  The experts said no, as long as the demand is strong.

The information below was gathered from various sources and is described in each paragraph.

Multi-Family/Commercial Property Management Services

By Arizona Investment & Management LLC

Arizona Investment & Management is much like larger companies from the point of having access to technology such as CoStar®, LoopNet® and even MLS®.  Marketing a property is accomplished using the same tools and methods.  Our strength and difference is that AIM is focused on each client and their needs verses the needs of national executives or abstract goals.

For buyers, AIM has extensive knowledge and understanding of the Phoenix metro area from a Property Management and ownership perspective.  We understand servicing multifamily projects through managing tenant leasing, property operations, unit turns, and value add improvement to increase income and cash flow.

Our team is small and effective.  Because we work to understand buyer and seller requirements and have intimate understanding of the Phoenix area, AIM guides your investments through knowledge and quality information.  Unlike the larger companies our team has something to prove and show our brand is worth your time.  We look forward to providing you an open and honest experience.

Recent Transaction by AIM

Revere Apartments
A 22 unit apartment building in Mesa, Arizona.
  • Sold price = $1,407,000, $63,954.55 per door
  • Sold Net Operating Income reported of $91,274 and a Capitalization Rate of 6.49%
  • Property sold as a value-add.

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AIM Professional Real Estate Services

AZ LICENSE: LC645202000

2720 E. Thomas Road, Suite B270
Phoenix, AZ 85016
Phone: (602) 277-7368
Drew Gibson | Principal
Email: drew@aimlease.com

Please call us at (602) 277-7368 or complete this form to request information on our property management services.

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