Inflation Nation
Key Takeaways
According to the BLS, Phoenix MSA was the 6th best performing Sun Belt metro in March, having not only gained back Covid job losses but reattaining peak employment.
The Phoenix MSA continues to be a nation leader in year-over-year rent growth rising 23.4% to $1,641. This growth rate is nearly two times higher than the National average which increased 13.7%, but still $40 below the National average rent of $1,681.
Occupancy maintained record highs increasing 110 bps over-the-year to 97.3% and only 10 bps below the highest occupancy reading on record, 97.4%, set in Q3 2021. Occupancy remained high despite delivering over 10,700 new units since 2021 and marks the 41st consecutive quarter that occupancy has been above the 20-year average of 91.6%.
Given the current construction rate, 2022 should prove to be the highest delivery amount since 2009’s 9,315-units with 13,000 new unit deliveries.
Investment sales volume increased 35% over-the-year to its highest ever Q1 reading of $2.5B, with average PPU (Price Per Unit) increasing 47% to $307,387.
Average rent for Greater Phoenix continued its upward slope rising 23.4% year-over year to $1,641 and up over-the-quarter by 2.5%.
Outlook
Total US Nonfarm payrolls increased by 431,000 in March, compared with the Dow Jones estimate of 490,000. The unemployment rate dropped to 3.6%, below expectations. Since May, U.S. nonfarm employment has recouped 93% (20.764M) of the job losses stemming from Covid. The Greater Sun Belt region, including Phoenix, has generally recovered faster than the rest of the country with Phoenix, #6 in the Sun Belt, and along with DFW, San Antonio, Austin, Jacksonville, Tampa, Raleigh, Charlotte and Savannah have reattained peak employment.
As of the end of Q1, inflation hit a new 40-year peak at 8.5%. Inflation, now, is so high that we are near the hyper-inflation days of the late 1970s/early 1980s.
While real time adjustments from shorter leases can hurt in a rapidly deflating, or over-built, market; in a high-to-hyper-inflationary environment, such as the one we are in, has allowed multifamily operators to generally stay ahead of the inflationary effects on money.
According to the BLS, Phoenix MSA was the 6th best performing Sun Belt metro in March, having not only gained back Covid job losses but reattaining peak employment.
The Phoenix MSA continues to be a nation leader in year-over-year rent growth rising 23.4% to $1,641. This growth rate is nearly two times higher than the National average which increased 13.7%, but still $40 below the National average rent of $1,681.
Occupancy maintained record highs increasing 110 bps over-the-year to 97.3% and only 10 bps below the highest occupancy reading on record, 97.4%, set in Q3 2021. Occupancy remained high despite delivering over 10,700 new units since 2021 and marks the 41st consecutive quarter that occupancy has been above the 20-year average of 91.6%.
Given the current construction rate, 2022 should prove to be the highest delivery amount since 2009’s 9,315-units with 13,000 new unit deliveries.
Investment sales volume increased 35% over-the-year to its highest ever Q1 reading of $2.5B, with average PPU (Price Per Unit) increasing 47% to $307,387.
Average rent for Greater Phoenix continued its upward slope rising 23.4% year-over year to $1,641 and up over-the-quarter by 2.5%.
Outlook
Total US Nonfarm payrolls increased by 431,000 in March, compared with the Dow Jones estimate of 490,000. The unemployment rate dropped to 3.6%, below expectations. Since May, U.S. nonfarm employment has recouped 93% (20.764M) of the job losses stemming from Covid. The Greater Sun Belt region, including Phoenix, has generally recovered faster than the rest of the country with Phoenix, #6 in the Sun Belt, and along with DFW, San Antonio, Austin, Jacksonville, Tampa, Raleigh, Charlotte and Savannah have reattained peak employment.
As of the end of Q1, inflation hit a new 40-year peak at 8.5%. Inflation, now, is so high that we are near the hyper-inflation days of the late 1970s/early 1980s.
While real time adjustments from shorter leases can hurt in a rapidly deflating, or over-built, market; in a high-to-hyper-inflationary environment, such as the one we are in, has allowed multifamily operators to generally stay ahead of the inflationary effects on money.
