Arizona Governor Doug Ducey says lawmakers may have to reconsider current short-term rental laws in the upcoming legislative session after multiple complaints from some neighborhoods and smaller communities, including Sedona. Read more here.
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2019 could be shaping up to be a weak year while demand in the desert grows
“This is notable because the bulk of rent growth tends to occur in the first half of the year. If the past is any guide, 2019 would be hard-pressed to continue the bullish outcomes of the last six years if things don’t improve quickly,” Yardi Matrix says in the report.
“If the past is any guide, 2019 would be hard-pressed to continue the bullish outcomes of the last six years if things don’t improve quickly,” the report says.
Year-over-year rent growth tops in Phoenix and Las Vegas
Demand in the desert continues to show up in the year-over-year numbers Yardi Matrix says in the report.
- Rents increased 2.5% year-over-year in May, down 50 basis points from April and 80 basis points from March. The year-to-date increase of 1.2% is the slowest rate of growth since 2011.
- Renter by Necessity (3.0%) continues to grow at a faster rate than Lifestyle (1.7%). Only eight metros top the 2.5% overall national average in Lifestyle rents, but 22 metros top 2.5% growth in RBN rents.
- Phoenix (6.8%) overtook Las Vegas (6.6%) in May to lead the rankings. The metros are one and two in both Lifestyle and RBN rent growth, and both have increased occupancy rates of stabilized properties by 20 basis points over the past year (Las Vegas to 95.0% and Phoenix to 95.5%) despite adding a significant amount of new supply. Meanwhile, Houston (0.4%) and Seattle (0.8%) have the weakest growth.
“The National Association of Business Economists released a survey that found a growing number of prognosticators increasing the odds that a recession will start in 2020,” the report says.
“Even though a recession in the near term remains a minority opinion, however, the downside risks are growing. The biggest reason cited is trade uncertainty, with 88% of economists surveyed downgrading growth forecasts because of President Trump’s policies on trade, which include tariffs on imports from China and Mexico. The other top reasons cited for the weaker growth outlook are stock market volatility and slowing global growth,” Yardi Matrix says in the report.