If you own a rental property in Phoenix — or you’re thinking about buying one — the market today looks very different from even a year ago. Rents are down in some neighborhoods, vacancies are up, and landlords are offering concessions to fill units. But the picture varies depending on where you are and what you own.
A surge of new apartment construction has collided with softening demand across the Phoenix metro, creating conditions that favor renters for the first time in years. Patrick O’Sullivan, broker and owner of Get MULTIfamily in Phoenix, works with small and mid-size rental property owners across the metro and is watching these dynamics play out in real time.
Where Things Stand
The Phoenix rental market is caught in a supply-and-demand imbalance. New construction has outpaced tenant demand, pushing rents lower, lengthening vacancy periods, and forcing landlords to offer incentives to secure leases.
Tempe has been hit hardest. O’Sullivan says the submarket saw heavy building at the same time demand slowed. He considers 30 to 60 days a reasonable window to fill a unit there right now. “They built a lot, and demand is low,” he says. Anything stretching past 60 days typically signals a pricing problem.
Class B and C properties across the broader metro are still leasing, but landlords have had to get flexible. O’Sullivan’s team has used free first months, reduced move-in costs, and gift cards, depending on a specific tenant’s needs. “Not every tenant is the same,” he says. “Sometimes they don’t have full move-in funds, so we work with them there and keep the rent higher.”
What Sparked the Change
Two things happened at roughly the same time: new apartment supply flooded the market, and demand softened. High interest rates kept some renters in place longer but also priced potential buyers out of homeownership, adding competition to the rental pool in some areas, while others became oversaturated.
The less visible problem O’Sullivan flags is the gap between what a tenant was previously paying and what the market will actually support today. Rents across the metro have declined over the past year, and many owners haven’t adjusted their expectations. Having that conversation — telling a landlord their unit will rent for $1,000 when the last tenant paid $1,300 — is one of the harder parts of his job right now. “A lot of owners aren’t used to that,” he says.
What Everyone Should Know
For landlords, the most costly mistake right now is anchoring to last year’s rents. Overpricing a unit doesn’t just slow things down — it costs more in lost rent than a price cut would have. O’Sullivan’s rule of thumb: if a unit hasn’t rented in 60 days, the price is the problem.
Concessions should match the tenant rather than follow a one-size-fits-all approach. A free month might work for one renter; a reduced deposit might close the deal for another. The goal is to remove the specific barrier preventing a qualified tenant from signing.
Speed on follow-up also matters more than most landlords realize. O’Sullivan’s team uses a combination of automated systems and dedicated staff whose sole job is responding to rental leads. “That’s how we beat average market time,” he says. For self-managing landlords, even a simple system for responding to inquiries within a few hours can make a measurable difference.
For renters, this market is working in your favor — especially in Tempe and other oversupplied areas. If a unit has been sitting for a few weeks, you have room to negotiate on price, move-in costs, or both. Landlords are offering concessions more freely than they have in years, and asking for them is no longer unusual.
What’s Coming Next
O’Sullivan expects the elevated vacancy to persist for the next 12 to 18 months. Supply is still rising, and high interest rates continue to keep more people renting rather than buying. He’s also watching whether tenants brought in through heavy concessions will stay through their leases — or whether some of those deals lead to turnover and further costs for landlords.
Phoenix isn’t in freefall, but it is no longer the landlord-friendly market it was two years ago. Renters have real leverage. Landlords who price realistically, respond quickly to leads, and tailor concessions to individual tenants will fill their units faster than those waiting for conditions to reverse on their own.
About the Expert: Patrick O’Sullivan is the broker and owner of Get MULTIfamily in Phoenix, specializing in small and mid-size rental properties across the metro area. He works directly with landlords navigating shifting market conditions and brings hands-on experience in leasing strategy, pricing, and tenant management to his clients.
This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.
