Article Originally Posted by AZBigMedia on June 9, 2023
Following several years of rapid growth, the single-family build-to-rent sector is expected to record an uneven performance in 2023, according to Northmarq's Single-Family Build-to-Rent Special Report, which highlights the sectors mixed conditions after significant momentum during the past few years. The news is good in Metro Phoenix, which is No. 1 for new single-family build-to-rent development. Phoenix build-to-rent development is part of a bigger trend which has seen 20% of single-family build-to-rent construction starts in the West.
According to the report, deliveries should outpace absorption, resulting in higher vacancy rates. Tighter capital markets will restrict transactions and make undertaking new developments more challenging. Despite these obstacles, renter demand in the sector is expected to be supported by a labor market that is outperforming expectations and a for-sale housing market that continues to price out potential first-time home buyers. Longer-term, the outlook for the sector brightens — fueled by favorable demographic trends.
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