MARKET SNAPSHOT
Greater Phoenix’s 2026 economic outlook remains supported by multi-year, AI-linked investment—particularly across semiconductor expansion, advanced manufacturing, and data center infrastructure—providing a sturdy foundation for growth even as broader labor market volatility persists.
2026 is expected to remain a challenging year for rent performance—potentially the fourth straight year of negative growth—as concessions continue to pressure effective rents even as deliveries begin to downshift. Recovery will be uneven, with submarkets like North Scottsdale, Gilbert, and Chandler turning positive sooner than supply-heavy areas such as the West Valley and Downtown Phoenix.
Stabilized occupancy is likely to remain rangebound around 90.5% in the near term as Phoenix works through excess inventory. A mixed job outlook and potentially weaker international net migration could modestly slow household formation, but longer-term demand drivers—strong demographics, a diversifying economy, and relative affordability—still support an eventual recovery once the supply glut clears.
Phoenix enters 2026 still working through an outsized supply cycle that has kept fundamentals under pressure despite healthy underlying demand...