Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,580 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $1,970 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $2,880 |
| 5 Bedrooms | $3,341 |
| 6 Bedrooms | $3,742 |
| 7 Bedrooms | $4,041 |
| 8 Bedrooms | $4,243 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,970 | $345,341 | 0.57% | F |
| 3BR | $2,600 | $450,624 | 0.58% | F |
| 4BR | $2,880 | $622,674 | 0.46% | F |
| 5BR | $3,341 | $785,154 | 0.43% | F |
U.S. Census Bureau data (2024)
In ZIP code 85024 of Phoenix, AZ, the real estate market presents a nuanced scenario for landlords and small-portfolio investors. The median home value stands at $489,190, indicating a relatively stable housing market. With only 0.4% of listings experiencing price reductions, it's evident that sellers maintain strong pricing power. This is further supported by the 19-day median Days on Market (DOM), suggesting quick sales and high demand.
The rapid turnover and minimal price adjustments imply that homeowners are likely to continue setting the terms in the local real estate market. This bodes well for those looking to hold properties long-term, as it suggests limited downside risk. However, the appreciation potential for long-hold investors is modest. The data does not support aggressive growth expectations, but rather a steady, albeit slow, increase in property values.
On the rental side, the disparity between the Fair Market Rent (FMR) of $2180 for ZIP 85024 in fiscal year 2024 and the actual Zillow Observed Rental Index (ZORI) of $1,863 highlights an opportunity for landlords. The FMR represents the upper limit for rental prices, suggesting that there is room for rents to rise towards this benchmark. This upward pressure on rental rates can provide a cushion against any economic downturns and ensure a steady income stream for investors.
Landlords should consider the following strategies:
Maintain competitive rental pricing while gradually aligning them with the FMR to capture additional revenue.
Invest in property improvements to justify higher rents and attract tenants willing to pay closer to the FMR.
Prepare for a market where quick sales are possible, but significant appreciation may be limited, focusing instead on long-term rental income and moderate value growth.
The combination of stable home values, quick sales, and favorable rental dynamics in ZIP 85024 supports a conservative yet optimistic outlook for landlords and small-portfolio investors. While the data suggests a cautious approach to expecting substantial capital appreciation, the setup favors maintaining and potentially increasing rental yields over the next 12-24 months.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.