Most of the Greater Phoenix area facing spike in apartment vacancies

Article originally posted on CoStar on August 14, 2025

The multidecade-high wave of supply that poured into the Phoenix multifamily market over the past few years has meaningfully weighed on occupancy.

The Valley’s stabilized vacancy rate, which excludes newly built properties in lease-up until they reach 90% occupancy or are older than 18 months, has climbed from about 5.6% in 2019 to 8.5% as of the second quarter of 2025. That 290-basis-point expansion ranks as the fourth-largest increase among major U.S. apartment markets and is well beyond the 90-basis-point increase for the nation as a whole.

Not all of Phoenix’s neighborhoods are impacted equally, however.

New construction has been especially aggressive in Phoenix’s west-side suburbs as apartment builders target the rapid population growth in places like Goodyear, Glendale and Surprise. Since the onset of the pandemic, stabilized vacancy in the North West Valley and South West Valley has increased 400 basis points and 510 basis points, respectively, the largest expansions among Phoenix’s 13 primary submarkets.

Local property management professionals note that performance has been especially sluggish in the West Valley, and competition for prospective tenants remains heightened.

On the other side of the Valley, stabilized vacancy remains under 7% in places like Scottsdale and Gilbert, where underlying demand drivers are more robust. Median household incomes in North Scottsdale, Old Town Scottsdale and Gilbert trend above the countywide level, and a strong cluster of white-collar employers supplies the areas with a deep pool of well-qualified renters. Additionally, inventory growth has been more modest in Old Town and North Scottsdale.

Even so, these submarkets have not been immune to the challenges facing the broader Phoenix metropolitan area, and stabilized vacancy has risen between 150 and 210 basis points since 2019.

The Camelback area is the sole submarket in Phoenix that has seen strengthening occupancy since the pandemic’s onset. Stabilized vacancy improved from an average of 8.7% in 2019 to 7.5% in the second quarter of 2025.

Land for new multifamily construction is hard to come by in the Camelback Corridor, mitigating new development and keeping supply-side pressure largely at bay. Much of the submarket has already been built out with luxury resorts, Class A office buildings and for-sale homes. The Camelback submarket’s apartment inventory has grown by less than 10% since the start of