In the Southeast Valley, considerable growth in the tech sector at companies such as Intel and eBay has created strong demand for luxury rentals. Apartment construction is occurring at a rapid clip in Tempe, Chandler and Gilbert with nearly 3,300 units underway. The new units will outpace demand as the year progresses, softening occupancy rates and rent growth. In addition, rising home sales will also pose a challenge for operators as more renters consider homeownership ahead of a further rise in prices or interest rates this year. Private equity firms are active at the top end of the market with cap rates typically in the low- to mid-5 percent range.

• Employment – 3.5% increase in total employment – In 2013, employment in the Phoenix metro will rise by 63,000 positions, or 3.5 percent. The education and health services, and financial sectors will each expand payrolls by more than 10,000 positions. During 2012, job growth reached 2.8 percent.
• Construction – 3,223 units will be completed – A total of 3,223 units will be brought into service this year, reflecting a 1.1 percent gain in inventory. This includes more than 1,700 market-rate apartments. Last year 1,123 units were delivered.
• Vacancy – 140 basis point decrease in vacancy – Greater renter demand will outpace the surge in inventory additions this year. As a result, vacancy will fall 140 basis points to 6.2 percent. The preceding year there was a 70-basis point fall.
• Rent – 2.9% increase in effective rents – Improving occupancy will allow operators to raise rents. The average available effective rent will advance 2.9 percent in 2013 to $775 per month. Last year, rents moved up 2.0 percent.

Please not above are forecast for the apartment rental. If you are in the single family home rental, the Rent Check published by ARMLS will be your good reference. However, the apartment rental is competing with single family rental for tenants in many market. So, this information is good to know and to keep in mind when you are making your move of invest or listing rentals.