LaPlante Appraisals' Blog

 

As we wrap up 2024, we thought it would be insightful to review and analyze the last 12 months of rental data in Maricopa County. Fluctuations in the number of available rentals and the volume of rented units offer insight into pricing power, competition, and investment opportunities. In the past 12 months, we see significant changes in Arizona's rental market, especially when analyzed by square footage. This analysis provides a comprehensive view of market shifts, offering valuable insights for stakeholders across the real estate industry. 
 

Between November 2023 and November 2024, Arizona’s rental market experienced notable shifts in both supply (active listings) and demand (sold listings). 

• Supply Growth: Overall, the number of active rental listings increased significantly from 15,780 in November 2023 to 21,427 in November 2024—a 35.8% increase. This surge suggests more rental properties entered the market, increasing choices for renters but also raising competition for landlords.
• Demand Increase: On the demand side, sold listings also rose, but at a much slower rate. The total number of rented units increased from 4,505 in November 2023 to 5,045 in November 2024, reflecting an 12% increase.
• Months of Supply (MOS): The Months of Supply (MOS) index rose from 3.50 to 4.25, indicating that supply is growing faster than demand. This shift suggests the market may be tilting toward a renter’s market, where renters have more negotiating power.

As we see there is an oversupply in smaller rentals, while good competition in the mid-size market and a larger saturation in the luxury market. The rise in MOS across all size categories indicates that renters are gaining more leverage in lease negotiations. Investors may see longer listing periods and should prepare for potential rent adjustments.

Arizona’s rental market is entering a period of flux. If supply continues to grow at a faster pace than demand, landlords may face longer listing times and downward pressure on rental prices. New construction activity and economic conditions will play a significant role in shaping future supply and demand. For renters, this shift signals an opportunity to find better deals and incentives. Investors may want to be cautious about acquiring small or large properties until the market stabilizes.

Stay tuned for 2025 updates on Arizona's rental housing trends to stay informed and ready to make strategic decisions.