By Roland Murphy for AZBEX
The national and Arizona multifamily market news has been filled for the past 18 months or so with news of market cooling, deliveries outpacing demand after the post-pandemic rush to build, increased vacancies, declining rents, et cetera.
To give some of the most current numbers, in its Q4 2025 Phoenix Multifamily MarketBeat report, Cushman and Wakefield reported a 12.8% year-over-year increase in vacancies for Metro Phoenix. 2025 deliveries totaled 20,645 units over the year, which was an 18% decrease from the record deliveries of 2024.
Absorption totaled 16,569 units, making it the second-highest year on record, again trailing 2024. 2025’s slightly diminished absorption still put it more than 170% higher than the historical average of 6,100 units.
Years of pent-up demand from underbuilding helped soften the impact of all the new units, pushing vacancy rates up a mere 30 basis points to their current 12.8%.
As anyone who has lived here for the past five years or more will recall, multifamily rents went insane during and after the pandemic, increasing 35% between the start of 2020 and late 2023, reaching a peak average of $1,750. The average rent currently stands at $1,584, making no one particularly happy. Owners have seen a couple hundred dollars of decreases, while renters still remember the $1,250 average monthly cost of 2020.
To put the brakes on vacancy and give absorption a chance to catch up, multifamily construction permits plummeted. The Joint Legislative Budget Committee reported the Aug. 2024-Aug.2025 year-over-year volume dropped more than 30%, reaching just 14,582.
Because of the protracted government shutdown that started last September, data through the end of the year remains somewhat questionable.
In terms of construction starts, Northmarq estimated roughly 8,500 new units broke ground in 2025, a decrease of almost 50% from 2024, which the company says made for a total of approximately 25,000 units under construction.
What Does DATABEX Say?
Unlike most outlets covering the Arizona construction industry, we’re fortunate enough to have our own in-house, proprietary project database and Research team. While we certainly (perhaps obsessively) track outside sources, DATABEX is primarily fueled by public filings and construction documents, which sometimes leads to markedly different information from that available from the analysts and general news outlets.
One thing we can compile fairly easily is the number of projects moving into the development process. We add new projects as developers file their requests for rezoning, plan amendments, site plan and design reviews, giving us as close to up-to-the-minute source information as possible.
That raised the question: How has the pace of new multifamily process entries shaken out over the last several years?
DATABEX was launched in mid-2016. At this point, some disclaimers are necessary:
- Some projects do not have valuations or unit counts in their documents;
- Projects include all types of multifamily, including traditional apartments, senior housing, student housing and freestanding Build-to-Rent;
- Master-planned projects have been eliminated from this report, but
- We have kept projects that have been cancelled or completed, as they have a direct bearing on the overall totals.
In terms of project announcements and filings added to the database, 2019 was the last “normal” year. There were 147 projects announced, with an initially planned unit total of 25,000.
While 2020 was an oddity in nearly every way for the world at large, it also marked the beginning of the development planning spike, as 206 projects came in for an estimated 39,000 units.
2021 was a continuation, with 294 projects making their way into the development process and planned units swelling to 62,700.
2022 was another banner year for new projects, with 256 multifamily projects entered into DATABEX for an estimated unit total of more than 60,000.
2023 saw the beginning of the slowdown. A total of 187 projects were entered, with an estimated unit total of 39,700.
For 2024, there were 111 projects entered, totaling 23,200 units.
2025 saw 112 new multifamily projects of all types entered into DATABEX, with estimated totals of slightly more than 19,000 units.
At almost two months into 2026, so far 16 multifamily projects have made it into the database for an estimated total of more than 1,735 units planned.
Even with the return to normal, a slower pace of new project announcements and permitting, Arizona still maintains a strong multifamily pipeline. While Northmarq reports 25,000 units under construction for metro Phoenix, DATABEX shows 19,418 in Phoenix proper, 26,250 in the Phoenix/Mesa/Scottsdale area and more than 67,000 statewide.