Apartment Market Sizzles in the Valley of the Sun

Apartment brokers Marcus & Millichap, in ranking Phoenix the nation's No. 10 market for apartment investors (down from No. 12 in '06), says of the local rental climate ...

"Asking rents are expected to gain 5.4 percent, to $1,543 per month, while effective rents are forecast to increase 5.9 percent, to $785 per month, this year. Asking and effective rents each climbed5.7 percent in 2006. Vacancy is expected to remain steady at 4.6 percent in 2007 as new units are quickly absorbed."

• Declining housing affordability will continue to support the Phoenix apartment market in 2007. While the local housing market has cooled, the median price for a single-family home in Phoenix is approaching $255,000, making it tougher for current renters to become first-time buyers, but still more affordable than both coats.

• While condos will tempt some renters, the gap between mortgage payments for the median-priced condo and the average Class A asking rent has increased significantly in the past year.

• Strong fundamentals will continue to attract institutional buyers to Phoenix. Investors may target more affordable properties to the west and in Pinal, while strong revenue growth should continue to drive prices higher for downtown properties.

To read more, CLICK HERE.

I first noted this trend in September HERE & October, HERE, with an update in February HERE when Apartment Owners Remained Bullish.

Housing Bubble and Real Estate Market Tracker from SA for 3/27

The S&P composite index of 10 major U.S. cities fell at a 0.7 percent annual rate, the first drop since 1996. This index tracks "repeat sales" rather than a median price for single-family residences in the region. That means it tracks the typical gain or loss a local seller experienced, then combined all those results into a two-month moving average of the math. Read more HERE and read Eddy's take HERE.

S&P/Case-Shiller Home Price Indices/January 2007 - Dire?