I am considering getting into this space (looking at some courses), but worried that its too late, and that deep local market knowledge/understanding of buyers/connection with developers etc is required to make this work, which only incumbent/long term investors will have and would be hard for a new entrant starting from scratch to catch-up...is my hypothesis valid in your opinion ?

It feels like the focus has shifted from creating value to chasing quick payouts, with little regard for the end buyer.

I think it will add more competition to the rental market and the buyer market specifically up in N Phoenix, Deer Valley, Desert Ridge, and then up into Anthem - but will bring up value throughout the county. 

They give the same $12k in closing costs to new buyer, $24k in realtor commissions, tack on say $4k in late fees, foreclosure costs, etc etc etc  so they “net” $360k.

Additionally, these properties generally attract long-term tenants with longer leases, offering more consistent cash flow

Those are buyers not renters unless there is some other circumstance.I think you are right about supply....apartment construction is just about to come to a halt and unless interest rates drop in 1/2 probably won't see that pickup for a while. 

Proceed with caution—Buyer Beware!

Initially, I had listed it and found a buyer, but the deal fell through when the buyer had to back out.

I sold an apartment building and as I lived in the building was always there when my realtor showed it to prospective buyers. 

The industrial buy and hold buyers have virtually dried up in San Diego.