Are you thinking about buying or selling a home in Phoenix? If so, you're probably wondering what's happening in the current Phoenix housing market. Well, as of June 2025, the Phoenix housing market shows a mixed bag of trends. While listing prices have slightly decreased, inventory is increasing, and homes are staying on the market longer. This indicates a move towards a more balanced market, rather than the seller's market we've seen in recent years.
Phoenix Housing Market Trends in 2025:
Let's break down the latest data from ARMLS to get a clearer picture:
Key Metrics (June 2025):
- Sold Listings: 6,511
- New Listings: 8,351
- Active Listings (Excluding UCB/CCBS): 25,245
- Under Contract Listings (Pending/UCB/CCBS): 7,183
- Average Sales Price: $588,584
- Median Sales Price: $448,000
- Average $/SF (Sold): $276.20
- Median $/SF (Sold): $252.29
- Month of Supply: 3.88 months
- Absorption Rate: 25.79%
- Average Days on Market (DOM): 79 days
- Median Days on Market: 57 days
Phoenix Listing Inventory: A Welcome Increase
One of the most significant shifts is the increase in active listings. We're seeing a noticeable rise in the number of homes available for sale. Active listings (excluding UCB/CCBS) have reached 25,245. This is up from the past few months and signifies more choices for buyers. This increased inventory is a huge factor influencing prices and buyer power.
What this means for buyers: More inventory translates to less competition and more negotiating power. You're less likely to get caught in bidding wars.
What this means for sellers: You need to be more strategic about pricing and presentation to stand out from the crowd.
New Listings: Fueling the Inventory
New listings are playing a crucial role in increasing inventory. In June 2025, there were 8,351 new listings, which is more than the amount of sold listings, replenishing and expanding the options for prospective buyers, but represents a significant decrease of -16.65% compared to the previous month.
Phoenix Sales Prices: A Slight Adjustment
While sales prices remain high overall, we're seeing a subtle downward trend.
- The average sales price in June 2025 was $588,584.
- The median sales price was $448,000.
However, looking at the month-over-month changes, both of those numbers have decreased, with the average sales price lowering by -1.19% and the median sales price lowering by -0.67% over the previous month. This suggests that the rapid price appreciation we saw in recent years is beginning to cool off.
My Take: I believe this price stabilization is a healthy correction. Unsustainable price growth would have long-term consequences. A more balanced market benefits both buyers and sellers in the long run.
Price Per Square Foot: Reflecting the Price Trend
Consistent with the trend in home prices, the price per square foot is also seeing some adjustments.
- The average price per square foot for sold listings in June 2025 was $276.20.
- The median price per square foot for sold listings in June 2025 was $252.29.
As with the previous, this represents a decrease of -0.75% and -1.33% respectively compared to last month.
Days on Market: Homes Take Longer to Sell
Another indicator of a shifting market is the increase in the number of days homes are staying on the market. In June 2025, the average days on market (DOM) was 79 days, while the median DOM was 57 days. This is up from previous months, indicating that buyers are taking their time and sellers need to be patient.
Why is this happening? With more inventory and less urgency, buyers can afford to be more selective and take longer making decisions.
What sellers in Phoenix can do:
- Stage your home beautifully.
- Be prepared to negotiate.
- Highlight your home's best features.
Month of Supply and Absorption Rate: Key Indicators
- Month of Supply: 3.88 months
- Absorption Rate: 25.79%
These metrics tell us how quickly homes are selling relative to the available inventory. A higher month of supply and a lower absorption rate indicate a cooler market, favoring buyers.
Generally, a month of supply between 5-6 months indicates market balance.
Under Contract Listings: Analyzing Pending Sales
Under contract listings provide insights into the number of homes currently pending sale. As of June 2025, there were 7,183 homes under contract. Though this figure is useful, it continues to shrink rapidly since the previous month, with a decrease of -7.78%.
New List Prices: Expectations vs. Reality
New list prices are important because they show what sellers are asking for their homes. The average new list price in June 2025 was $614,917, and the median was $469,000. This shows a general decrease in pricing compared to the previous month.
My advice to sellers: It's essential to price your home competitively based on current market conditions, not what you hope to get. Overpricing can lead to your home sitting on the market for longer, ultimately resulting in a lower sales price.
Interest Rates and Their Influence
Interest rates play a major role in housing affordability. Higher rates can reduce buyer demand, putting downward pressure on prices. It's crucial to keep an eye on interest rate trends when making housing decisions. Consult with a mortgage professional to understand how interest rates impact your specific situation. This is something I do regularly to stay on top of the market because of all the different changes.
Factors Shaping the Phoenix Market
Several factors are influencing the current Phoenix housing market trends:
- Population Growth: While Phoenix has seen significant population growth in recent years, some reports indicate that growth is slowing slightly.
- Economic Conditions: The overall health of the economy, including job growth and unemployment rates, impacts housing demand.
- Seasonal Trends: Real estate often follows seasonal patterns, with spring and summer typically being busier seasons.
What Does This Mean for Buyers in Phoenix?
It's a good buying opportunity!
- More Choices: Increased inventory gives you more options.
- Less Competition: You're less likely to get into bidding wars.
- Negotiating Power: You have more leverage to negotiate favorable terms.
- Time to be Strategic: You can take your time to find the right home and conduct thorough due diligence.
What Does This Mean for Sellers?
Presentation is Priceless.
- Price Competitively: Don't overprice your home; get a competitive market analysis (CMA) from a local Realtor.
- Stage Your Home: Make a positive first impression.
- Highlight Key Features: Emphasize what makes your home unique and desirable.
- Be Patient: It may take longer to sell your home in this market.
- Consider Incentives: Offering incentives like paying closing costs can attract buyers.
Final Thoughts: The current Phoenix housing market is undergoing a shift. While uncertainty can sometimes be scary, I believe it gives greater opportunity to those looking for options.
Phoenix Housing Market Forecast 2025-2026
f you're wondering what's next for the Phoenix housing market forecast, here's the short answer: While we've seen prices cool off recently, don't expect a major crash. The Phoenix, Arizona housing market is predicted to see a continuing gradual dip in the coming months, but a strong overall collapse is very unlikely, and price appreciation will remain positive.
Before we dive into the forecast, it's important to understand the current state of the Phoenix housing market. Phoenix, Arizona has experienced phenomenal growth in recent years, driven by a multitude of factors.
The city's population has grown rapidly. From 2010 to 2020, the population increased by 11.2% to 1.6 million people. Between 2020 and 2023, it grew another 4%, adding nearly 200,000 residents. As of 2024, the population is estimated to be over 4.7 million, reflecting a 1.27% increase from 2023. This surge in population is due to factors such as:
- Job Opportunities: Phoenix has experienced strong job growth across diverse sectors. The expanding economy has attracted individuals and families seeking new career opportunities.
- Remote Work: The rise of remote work has also contributed to the influx of new residents. Many people are moving from more expensive areas to enjoy a better quality of life and lower cost of living, while still retaining their jobs in other parts of the country.
- Exurbs: The Census Bureau has noted a significant growth in exurbs surrounding major metropolitan areas, and Phoenix is no exception. This trend, likely fueled by increasing housing prices and the ability to work remotely, is contributing to the expansion of the Phoenix metropolitan area.
The Phoenix housing market, like many others across the country, has been on a wild ride, and it's tough to predict with certainty what will happen. I've been watching the trends closely, and here's my take based on the available data and what I'm seeing on the ground.
Recent Trends: A Slowdown After the Boom
The average home value in the Phoenix-Mesa-Scottsdale area is currently around $456,017. While that's still a significant number, it's important to note that it's down 3.2% over the past year. This cooldown is partly due to higher interest rates, which have made mortgages more expensive and reduced buyer demand. Homes are also sitting on the market longer, taking around 34 days to go pending.
Phoenix Housing Market Predictions: Gradual Decline
Let's dive into some specific forecasts. Zillow, a reliable real estate data source, has provided its predictions for the Phoenix market:
Time Period | Forecasted Price Change |
---|---|
July 2025 | -0.5% |
September 2025 | -1.5% |
June 2025 to June 2026 | -1.7% |
As you can see, the forecasts suggest a slow, steady decline in home values. This isn't a cliff dive, but rather a gentle easing of prices.
How Does Phoenix Compare to the Rest of Arizona?
It's helpful to see how Phoenix stacks up against other markets in Arizona. Here's a quick comparison based on Zillow's forecasts for the next year:
- Phoenix: -1.7%
- Tucson: -1%
- Lake Havasu City: -1.7%
- Yuma: 1.2%
- Flagstaff: 1%
- Sierra Vista: -2.4%
As you can see, the Phoenix housing market is projected to perform similarly to other areas in the state, like Lake Havasu and Tucson. What is different is that Yuma and Flagstaff are expected to grow.
National Picture: A Brighter Outlook?
It's also essential to consider the national housing market forecast. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), has a more optimistic view. He believes that “brighter days may be on the horizon” for the U.S. housing market overall. His forecasts include:
- Existing Home Sales: Expected to rise 6% in 2025 and 11% in 2026
- New Home Sales: Projected to climb by 10% in 2025 and 5% in 2026
- Median Home Prices: Forecasted to increase modestly by 3% in 2025 and 4% in 2026
- Mortgage Rates: Anticipated to average 6.4% in the second half of 2025 and dip further to 6.1% in 2026
Yun sees falling mortgage rates as a “magic bullet” for the market, boosting affordability and demand.
Will the Phoenix Housing Market Crash? My Thoughts
Based on the numbers and what I'm hearing from other agents and homeowners, I believe the Phoenix housing market has stabilized to a certain extent. I think that the risk of a massive crash is low. The limited supply of homes, coupled with the continued population growth in the Phoenix area, should provide some support to prices.
However, I also don't foresee a return to a hyper-competitive seller’s market. Buyers will likely continue to have more negotiation power, and homes will probably take longer to sell.
What About 2026?
Predicting the housing market 12 months out is tricky, but the trends suggest this:
- Continued price Stabilization: I expect that the market will be more balanced by 2026. Mortgage rates may decrease moderately, which will stimulate buyer action and will increase prices again.
- Slow and steady: While this may not cause a “crash,” it shows this pattern is here to stay.
In Conclusion: Moderate Dip and Slow Growth
I believe the Phoenix housing market forecast points towards a continuation of moderate decline. The pace of sales will be steady, allowing both buyers and seller to make their moves.
Should You Invest in the Phoenix Real Estate Market?
Investing in real estate is a significant decision that requires careful consideration of various factors. It's safe to say that Phoenix is currently a great place for both buyers and sellers. As a buyer, however, it's essential that you evaluate all your options carefully and try to negotiate a better price if possible. The Phoenix Metropolitan Statistical Area (MSA) has been a popular choice for real estate investment due to several compelling reasons supported by factual data:
1. Strong Population Growth
The Phoenix MSA has consistently experienced robust population growth. According to the U.S. Census Bureau, Phoenix was one of the fastest-growing cities in the United States. The increasing population creates a steady demand for housing, making it an attractive market for real estate investment.
2. Thriving Job Market
Phoenix boasts a diverse and thriving job market. The city has become a hub for various industries, including technology, healthcare, manufacturing, and finance. Employment growth stimulates demand for housing, which is a key driver for real estate investment. As of the latest available data, the unemployment rate in the Phoenix MSA is relatively low compared to the national average, indicating a stable job market.
3. Favorable Economic Environment
Phoenix offers a business-friendly environment, attracting corporations and entrepreneurs. The favorable economic conditions contribute to a strong real estate market. According to data from the Greater Phoenix Economic Council, the region has seen consistent economic growth, supporting real estate development and investment.
4. Affordable Housing Market
Compared to other major cities in the United States, the Phoenix MSA offers relatively affordable housing options. The cost of living and housing prices, although rising, is still attractive when compared to cities like Los Angeles, San Francisco, or New York. This affordability makes it appealing to both buyers and renters, increasing the potential for return on investment.
5. Tourism and Lifestyle Appeal
Phoenix is a popular tourist destination, attracting visitors throughout the year. The tourism industry contributes to the demand for short-term rental properties, making it a lucrative venture for real estate investors. Additionally, the city's favorable climate and lifestyle amenities make it an appealing location for both residents and investors.
6. Infrastructure and Development
The Phoenix MSA has witnessed substantial infrastructure development to accommodate its growing population and economy. Investments in transportation, education, healthcare, and other amenities enhance the overall quality of life, making the region more attractive for real estate investment.
Considering these factors, the Phoenix Metropolitan Statistical Area presents a compelling opportunity for real estate investment. However, it's essential to conduct thorough market research, consult with real estate professionals, and assess your investment goals before making any investment decisions.
7. Strong Demand for Rental Properties
Phoenix has experienced a significant influx of residents in recent years, driven by factors such as job opportunities, affordable living, and a desirable climate. Many newcomers initially opt for rental housing, creating a robust demand for rental properties. This demand is projected to continue as the population grows.
Rental rates in Phoenix have been steadily rising due to the high demand for rental properties and the overall growth of the area. While still more affordable than some major cities, rental rates have seen a notable increase, providing a potential for a favorable return on investment for property owners.
Phoenix's lower cost of living and relatively affordable rental rates compared to major cities make it an attractive option for individuals and families looking to rent. The affordability factor contributes to the sustained demand for rental properties in the area.
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