Following the onset of the pandemic, Arizona managed to further diversify and expand its economy, cementing its reputation as a top-tier commercial hun – bringing both prosperity and new problems. As residents and businesses poured into the Valley, demand for multifamily housing outstripped supply, leading to higher rents and diminished affordability across the region. Developers responded with a burst of apartment construction that tamped down rents and increased vacancy, leaving some observers concerned about the balance of the market.

“To be candid, I’m not sure if we’re over or underbuilt,” says Justin Steltenpohl, CEO of P.B. Bell. “If I had to choose, I’d say Greater Phoenix is still under. 2022 was the first year we had around 10,000 units built, then that number increased substantially to 28,000 in 2025.”

Even though more multifamily housing has been built recently, Steltenpohl says focusing just on the past few years doesn’t capture the long-term trends. He sees it like this: if 12,000 units were needed annually for a decade and a half, but during 12 of those years only 8,000 were built, there would be a 48,000-unit shortfall.

“The problem is the entire backlog came to market within a few years,” Steltenpohl continues. “It reminds me of ‘Tom and Jerry’ when there’d be a kinked garden hose, and a huge bubble would grow until it sprayed water everywhere. Right now, we’re all feeling like a wet cat.”

Click here and scroll to page 86 for the full AZRE article by Kyle Backer.