Phoenix Apartments Search Trends

September 15th, 2008 by Matt DiChiara| Posted in Apartment Market Info | No Comments »

Last week, we released some of our internal data that detailed rental search trends for Phoenix apartments. Check out our publication on the Phoenix rental trends here.

When we reviewed the numbers for some of our most popular cities, we found that renters in Phoenix are searching for homes for rent and 3 bedroom apartments for rent at a rate approximately 3 and 2 times the national average, respectively.

We studied various renter behaviors across our site for cities that had received more than 50,000 searches in the second quarter and found this Phoenix rental trend particularly illustrative of the interaction between the housing crisis and the apartment rental market.

Searching for Larger Apartments and Rental Homes

Such a high percentage of searches for rental housing geared towards larger groups of renters such as families suggests that many people are avoiding the for sale market.

We tend to correlate the disproportionate searches for larger rental housing with Phoenix’s high foreclosure rates. We think that the high number of search traffic is comprised mainly of households that are returning to the rental market after foreclosure as well as potential homeowners who are uncertain as to how much prices will drop.

Households that require the extra space and have become accustomed to living in single family homes will continue to search for affordable alternatives such as Phoenix homes for rent.

Furthermore, the housing bubble resulted in a surplus of unsold homes in Phoenix that are being converted to rentals in what has been referred to as the Phoenix’s shadow market. Homeowners, investors and speculators are trying to mitigate losses by renting their homes to help with mortgage payments.

Thus, both supply and demand are growing, leading to an overall increase in search.

We also saw that searches for 3 bedroom apartments were anomalously high. We think that this can also be attributed to the high foreclosure rate in Phoenix. The same renters who are looking for rental homes may also consider living in a larger apartment; perhaps these renters are betting that they will be able to save money by living nearer their jobs or by public transportation.

Although we expect to see a higher percentage of searches for 3 bedroom apartments across the nation as increases in the cost of living drive more and more people to share resources, demand for apartments with at least 3 bedrooms in Phoenix should continue to outpace the national average. A general trend predicting an uptick of the number of searches for apartments to share is anticipated nationwide, but housing pressures should be more acute in Phoenix and therefore the core number of larger families that will rent should remain above average.