Q125 | Multifamily Market Report | Phoenix, AZ

Market Overview

Phoenix remains one of the fastest-growing metros in the U.S., driven by strong population inflows, favorable cost of living, and robust employment growth. In Q1 2025, the market absorbed 4,800 units, yet new supply continues to outpace demand—with 23,000 units under construction and a vacancy rate rising to 11.9%. Downtown Phoenix and Tempe are absorbing much of the development activity, and concessions—up to 6–8 weeks of free rent—are now common across lease-ups. While stabilized communities have held occupancy steady for over 18 months, ongoing rent declines and elevated vacancies suggest continued softness through 2025 before a possible recovery in 2026.

About Matthews

Matthews Real Estate Investment Services is a national commercial real estate firm specializing in investment sales and advisory services across multifamily, retail, and industrial sectors. Known for combining real-time market intelligence with client-first service, Matthews produces in-depth research reports covering top U.S. metros. Their multifamily market insights provide granular analysis on supply pipelines, absorption trends, investment activity, and submarket performance. In high-growth markets like Phoenix, Matthews’ reports serve as a strategic resource for investors and operators navigating volatility and long-term value opportunities.