Well, quite honestly it comes as no surprise that the continued strong demand for rentals in our Phoenix Metro area market has been diminishing rental supply and driving up lease prices.
In a recent blurb from Michael Orr and the Cromford Report, he reports that the single family rental supply has dropped to just under 2200 active listings, where we typically see 4000 to 5000 at this time of year.
On top of that, the average rent is now $1922 per month, up from $1773 last month and $1598 one year ago. If my math is correct, that amounts to an 8% rental increase in one month and just over 20% from one year ago. Sure is a good thing we got some cheap gas prices recently.
The condo market is not much better, he reports, as there are currently 974 condo units for rent compared with 1331 last year – a 27% drop in supply. And, the average rental price has risen from $1429 last year to $1575 at this time. This is a 10% increase.
These numbers validate our strong opinion that either one of two things are going to happen with “millennial” housing. Either they will realize that buying a home at 4% mortgage rates, gaining a tax advantage, and not having to worry about the landlord raising the rents, will trump renting. Or, it will drive them back to the folks’ house for permanent living.
Reminds me of a 70’s sitcom series that sounded like, “Welcome Back Squatter!”