Apartment Rents in Some Phoenix Areas Have Recovered from the COVID-19 Dip

Article originally posted on CoStar on June 29, 2020

West Valley apartment rents have fully recovered from the March to April decrease. Aventura Apartments in Avondale pictured. (CoStar)

West Valley apartment landlords in the Phoenix metropolitan area can celebrate a return to pre-virus rent levels that their counterparts in other submarkets have yet to witness. Across the Phoenix market, apartment communities reacted quickly to the economic disruption caused by the pandemic, as evident in the daily asking rent series. CoStar is uniquely positioned to track near real-time rent movement in the market, through the collection of 65,000 daily rent observations, on average, in Phoenix through Apartments.com.

Daily asking rents are starting to tick up following a nearly 2% decrease from mid-March through April.

The daily asking rent series demonstrations that rents fell nearly 2% from the March peak through April. However, that trajectory has already changed, and rents started to rise again, though the rate still has a ways to go before returning to pre-virus levels.

The ability to raise rents is the product of relatively tight vacancies and strong rent collections that have exceeded expectations. Nationally, about 95% of renter households made a full or partial payment in May according to the NMHC rent payment tracker, which is about 1.5% below the rent collections during the same period last year. Of course, while many renters who were laid off or furloughed are facing financial hardships, federal and state stimulus have helped them pay the rent.

Looking ahead, enhanced unemployment benefits are scheduled to expire at the end of July, and future rental demand will depend on how many — and how quickly — Phoenicians return to work.

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