Thousands of new downtown Phoenix apartments are coming to ‘weird market’

Mar 18, 2024, 4:15 AM

Construction of the second phase of X Phoenix halted last fall. (Jim Poulin/Phoenix Business Journa...

Construction of the second phase of X Phoenix halted last fall. (Jim Poulin/Phoenix Business Journal)

(Jim Poulin/Phoenix Business Journal)

About 2,400 apartment units are under construction in downtown Phoenix, putting the submarket in danger of being overbuilt.

Developers have been ramping up apartment construction throughout Phoenix for the past several years, which is causing real estate experts such as Peter O’Neil, research director for Northmarq, to expect a peak in new rental construction in 2024.

“As far as the potential for overbuilding is concerned, I think that is a valid concern in downtown, just like it’s a legitimate concern in nearly all of the submarkets in the Phoenix area at least in the near term,” O’Neil said.

Northmarq is forecasting 20,000 units to come online in 2024 across the region, with downtown Phoenix accounting for about 1,200 units, he said. However, O’Neil is forecasting a sharp decline in multifamily permitting and construction starts in 2024.

“So we’ll overbuild in the short term and then demand should catch up with supply in the next few years as we slow the pace of new construction,” he said.

This story is posted in partnership with Phoenix Business Journal. Click to read the full story.

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Thousands of new downtown Phoenix apartments are coming to ‘weird market’