As home prices rise in metro Phoenix, so does the number of people forced to rent

By Sarah Edwards, Cronkite News

Phoenix – Rents in Maricopa County were steadily rising even before the pandemic began in March 2020. With home prices now at record levels, more people are being forced to rent homes, condos and apartments, adding upward pressure on rents.

said Scott Wilkin, senior planning project manager for the Maricopa Association of Governments, or MAG. “There aren’t many apartments that they (families) can accommodate, so it’s only natural that they are looking to rent homes.”

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Housing experts say the problem is that there are too few homes to buy or rent and too many people are moving into – or within – the valley. There is a construction boom, but they say it will take years to bring enough homes and apartments to market to meet demand in one of the country’s fastest growing metros.

MAG, the Phoenix Regional Planning Council, created the Interactive Housing Data Explorer to show changes in housing affordability and rental rates over the past 10 years. It shows that the median sales price for homes, including single-family, condos and townhouses, was $427,500 in December 2021 — a 25 percent increase from the previous year.

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The dashboard also shows that more than 50 percent of apartments in the last quarter of 2021 had rents of at least $1,500 a month, compared to the fourth quarter of 2020, when that segment made up just 20 percent.

Lexi King, a full-time student majoring in social work at Arizona State University, is looking for a place to live for the upcoming school year. She said it was almost impossible to find a place where she felt safe and could afford it as a student who also works about 30 hours a week.

King is looking for a place where she can have her own bedroom and bathroom, and she doesn’t mind if that means living with roommates. She hopes to stay within her budget of $700-$900 per month.

“It’s very hard to find anywhere in the budget or where I feel safe or comfortable living,” she said. “I’m part of the rental and subletting groups on Facebook, and even then it’s still hard to find a place that fits all my needs.”

King lived on campus where she spent her first year and didn’t want to add to her already growing student debt.

“I know a lot of people who do exactly the same thing as me, which is ridiculous because obviously this is not an uncommon need,” King said. “The fact that so many people are unable to find housing is ridiculous.”

Phoenix is ​​a hot market for buyers and renters because of the available land space and cost, said Doug Ressler, director of business intelligence at real estate data firm Yardi Matrix.

“In the Northeast and Gateway cities, you have a lot of restrictive zoning laws and the cost of the land and the availability of land is limited versus what you see in the Southeast and Southwest,” he said. “Demand is chasing supply and supplies are now insufficient.”

Ressler said Arizona had a housing affordability and availability problem before COVID-19 hit, and the pandemic has intensified the timeframe for rental developments to be completed with the rise of the work-from-home lifestyle and people wanting more living space to spread out.

Wilkin said MAG data indicates that many homes are being built to rent rather than buy. Ressler said that people who had intended to buy a home were no longer able to because the selling prices of the homes increased more than salaries and wages. So people are resorting to renting houses instead.

“People want to buy a house, but they are locked out because housing is not available, so they are renting for longer,” Ressler said, noting that buying a home is a years-long commitment that not many people can afford. to make.

Hyalin Schwechtenberg has been living outside her car for the past year. After her mother’s death, she couldn’t keep paying for the space they shared, so she had to trim down her belongings, put bigger furniture in a storage unit, and live as lightly as she could in her car while she worked childcare.

“I’ve lived in the Valley for over 30 years, and I remember when I could have had a one-bedroom apartment for $700 a month,” she said. “I’m more about renting than buying because for me, at this point, it just doesn’t make sense for me to buy a house.”

Schwechtenberg said that even with her job and income, she can’t afford the initial costs that come with renting an apartment, such as security deposits and application fees.

The cost of buying has increased so dramatically that people have to choose between waiting to buy a home or rethinking moving to Phoenix altogether, said Sindy Ready, treasurer of the Arizona Association of Realtors.

“It’s really a concern we all have to be aware of because there aren’t enough homes for the number of people who want to live here,” Reddy said. “For the first time in our market history, we’re seeing very low rental listing inventory, just as we’re seeing very low stock on purchase.”

She said that because people are often able to work from home, they are beginning to move to the outskirts of Metro Phoenix.

According to MAG Housing Explorer data, Cave Creek, Carefree, and El Mirage saw the largest percentage change in housing sales prices, while Avondale, Glendale and Scottsdale saw the largest increase in apartment rents.

“It’s just crazy, the building going on right now,” Reddy said. “It brings a lot of wealth to our Valley industry and jobs, but it also puts that pressure on the housing market.”

Reddy said there is also a push for more housing and luxury apartment projects, which she says is also coming from market demand.

“If someone can’t find a home to rent, they’re going to want something with a little more amenities like a luxury pool and exercise facilities, so I think it’s just a requirement of what the tenants want,” she said. “There’s also difficulty finding homes. If someone is looking to rent a house, there aren’t enough rental homes for the number of people they want to have, and that pushes them to set up an apartment or cottage.”

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