An Overview of the Phoenix Rental Market

I recently ran across Trulia Market Trends and wanted to take a look at the Phoenix real estate market and compare it to the Phoenix rental market.

According to Trulia, the average sales price for homes in Phoenix has seen a 22.2% decrease in the price of a home from Nov 2007 - Jan 2008.

Phoenix has also seen the number of sales of homes be at its lowest point since 2000.

What does all this mean for the Phoenix rental market? Well, since demand for buying properties in Phoenix has decreased, we have seen a large demand in rentals increase.

When you see a larger demand than supply you tend to see prices go up. We are seeing rental prices increase in the Phoenix area but not by a significant amount. Why? Simply because even though demand for rentals has increased, the supply of rentals in the Phoenix area has also increased almost by the same amount. If you can’t sell your home, you tend to want to rent it out.

The average rental rates for Phoenix in May was $1287. Slightly higher than the average rental rates in April.

The surrounding areas in Phoenix have also seen a slight increase in rental rates month over month. These cities include average rental rates for single family homes, townhomes and condos:

Scottsdale - $1,866
Surprise - $1,256
Laveen - $1,329

We think the rental market will continue to improve in the Phoenix area as demand for rentals will begin to more strongly outpace the supply of rentals. By the end of the year, average rental rates for single family homes, townhomes and condos in Phoenix should be close to $1,300 - $1,350/ mo.