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East Valley Outperforms as Higher-End Rentals Overcome Supply Pressures
Class A momentum builds despite widening submarket divide. Phoenix’s multifamily market is poised for sustained recovery in 2026. Easing supply pressures and local inflation near national lows — below 2 percent in 2025 — will enable wages to catch up to asking rents. Performance will likely remain split by submarket, however, due to softer job growth and immigration headwinds. The East Valley and North Phoenix-Scottsdale corridors should be better positioned due to their affluent residents and steady job creation in healthcare and white-collar industries, which helped sustain vacancy compression into late 2025. With completions projected to fall by nearly 50 percent across the market in 2026, higher-end properties will face less competition from new supply, positioning Class A fundamentals to strengthen and potentially regain rent growth momentum. Meanwhile, centrally located neighborhoods and the West Valley may lag as lower-income renters face weaker hiring in sectors such as manufacturing, logistics, and hospitality, keeping pressure on Class B and C rentals.