Phoenix ranks number 6 among the hottest multi-family stores

New research shows Phoenix is ​​the sixth hottest U.S. multi-family sales market for the past decade.

Over the past decade, the price per unit (PPU) for apartment buildings has increased 156% to nearly $ 160,000. This increase exceeded both median sales prices and rental prices.

The latest CommercialSearch study compared and rated the most active U.S. metros in terms of multi-family sales since 2009.

READ MORE: Phoenix # 2 Hottest Property Markets Of 2021

Here are some highlights:

• Phoenix is ​​the sixth hottest US multi-family sales market in the past decade. As of 2009, Phoenix had multi-family sales of more than $ 42 billion.

In terms of transactions, 1,711 transactions have been completed across the metro since 2009, for a total of 385,717 units.

• In 2020 alone, Phoenix closed 125 deals and took 3rd place. The market had only 21 fewer deals than DFW, which was number 1.

• By comparison, nationally, the median rent rose 37% to $ 1,462, and the median home sales price rose approximately 58% since 2009 to $ 313,200.

We have never spent so much time in our homes. Average prices are at their highest level for generations. Because of supply constraints and interest rates that are on the ground and likely to stay there for some time, prices keep rising. The national median home sales price has increased approximately 58% since 2009 to $ 313,200. Over the past decade, as prices have increased, home ownership rates have slowly declined. In 2016, the US home ownership rate was 62.9%, its lowest level since 1965. Four years later, the home ownership rate approached its pre-crisis high of 67.9%, with much of the increase being driven by cheap borrowing costs. However, the pandemic has caused rates to drop to 65.8% from the fourth quarter of 2020.

During the same period, growth in national rental rates was somewhat moderated, increasing 37% to $ 1,462. For multi-family investors, those increases compared to property prices have pales. Nationwide, the price per unit (PPU) that apartment buildings are sold for has increased a whopping 156% since 2009 to nearly $ 160,000 from $ 62,371. Some large markets such as Manhattan, San Francisco, and Seattle saw PPU increases north of 200% in 10 years.

Online marketplaces have put the stationary retail trade under immense pressure. At the same time, industrial real estate has been broken down into essential or non-essential, the latter being more susceptible to market fluctuations such as manufacturing, while logistics and fulfillment thrive. Multi-families as an asset class are slightly better positioned in the event of market downturns simply because there is always demand. People have to live somewhere. But as always, some markets are better than others.

Hottest Multi-Family Business Markets – DFW, Atlanta & Phoenix

Dallas-Fort Worth has been the hottest apartment building market for the past decade. The market is expansive, spanning 11 counties and 9,300 square miles with plenty of development opportunities. The total subway has built 149,000 units since 2010, most of the nation using the subway. It also had the most deal flow. In the past decade, 2,227 multi-family stores have been completed, for a total of 516,693 units.

Atlanta may have lagged behind DFW in transactions, closing 2,134, but it had more trade units – 36,685 more – in fact a total of 553,378 units. Around 1,700 transactions had been completed in Phoenix, NYC and Houston by the end of 2019. Surprisingly, Houston totaled more than 425,000 units changing hands while the much larger Los Angeles market handled 134,000 transactions.

Interestingly, Houston kept up with DFW on multi-family transactions through 2015. Part of the reason the two fell apart was because oil prices fell and the energy-centric business environment in Houston shrank as oil companies started layoffs, which hit the local economy and the real estate industry. Houston created fewer than 5,000 jobs in November 2015, less than half a typical month – and the third worst in 25 years.

More than $ 912 billion worth of multi-family deals have been completed in the past 10 years. Nationally, multi-family stores hit $ 13.4 billion in 2009 and have skyrocketed since then. In 2019 alone, multi-family sales totaled nearly $ 130 billion nationwide, compared with more than $ 82 billion last year.

New York City and Atlanta have each earned more than $ 50 billion in multi-family sales since 2009, outperforming the most active markets and demonstrating the significant premium real estate realizes in those markets. For example, Atlanta has closed 2,134 deals in the past decade, nearly a hundred fewer than DFW. However, Atlanta’s sales volume was $ 6.3 billion above DFW’s sales volume over the same period.

Some markets have seen incredible growth seemingly overnight. Austin had 2010 sales of $ 390 million. Just two years later, it had almost quadrupled to $ 1.65 billion and has been around $ 2 billion since 2014. Similarly, Las Vegas had multi-family transactions less than $ 500 million in 2012, but closed over $ 1.1 billion from year to year and grew to nearly $ 3.5 billion in 2019.

At the same time, markets such as Seattle, Charlotte, and the Carolina Triangle saw immense sales growth that grew steadily every year. Charlotte had sales of $ 76 million in 2009 and has seen steady growth over the past decade. By 2020, sales were nearly $ 3 billion. Seattle grew from $ 270 million to $ 6.8 billion in 2019 – an increase of 2,397% before falling to $ 1.9 billion in revenue last year.

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