Search

Phoenix Real Estate Market Forecast: What Buyers & Sellers Need to Know

Sarah Herr
Mar 17
2 min read

Phoenix is in a Buyer’s Market—What Does That Mean for You?

Unlike stocks, which react instantly, home sales take time. Sellers list their homes, wait for offers (often 30+ days), then spend another 30-45 days in escrow before closing. It takes at least two months of recorded sales data to establish a clear trend in home prices.

Phoenix Real Estate Market Forecast...Is a Housing Market Crash Coming?

Despite concerns from some buyers, historical trends don’t support a real estate market crash during recessions. While the 2006-2008 housing crisis left scars, today’s fundamentals are different. In most recessions, home values remain stable or experience slow, steady growth. Additionally, mortgage rates often decline during economic downturns, increasing buyer demand.

That said, Phoenix’s housing supply is rising, and if this continues, home prices could see a gradual decline—not a crash. Currently:

Condos & townhomes under $400K have dropped -4.2% so far this month.
Luxury homes between $1M-$1.5M are seeing price growth of +5.5%.
Most other price points are hovering around 1-2% annual appreciation, below the inflation rate.

If mortgage rates drop, buyers will gain more purchasing power, which could stabilize prices.

Phoenix Real Estate Market for Sellers: What You Should KnowP

Unlike past downturns, today’s buyer’s market isn’t due to falling demand—in fact, the Cromford® Demand Index is rising. The real challenge? A flood of new listings.

So far in 2025, the Arizona Regional MLS has seen:

✅ More new listings than in the last four years

✅ The highest number of active listings since 2015

With more competition, sellers are adjusting their strategies:

🔹 Price reductions have surged 58% compared to last year.

🔹 Stronger buyer negotiations are leading to lower final sale prices.

For homes under $1M, sellers are currently negotiating 98.3% of their last list price—down from 98.6% last year. On a $500K home, that’s a $8,500 price cut vs. $7,000 last year.

Luxury sellers ($1M+ homes) are experiencing even stronger negotiations, with sales closing at 95.4% of the list price (vs. 96.4% last year). That’s a $46,000 reduction on a $1M home, compared to $36,000 last year.

The Good News for Sellers? Mortgage Rates Are Trending Down

Mortgage rates peaked at 7.26% in January but have since dropped to 6.78% (per Mortgage News Daily). If rates dip below 6.5%, buyer activity could increase, improving conditions for sellers.

Final Thoughts

Phoenix’s real estate market is shifting, creating opportunities for both buyers and sellers. If you’re thinking about buying a home, now is the time to take advantage of increased inventory and negotiating power. If you’re selling, pricing competitively and presenting your home well (think staging, fresh paint, and appliance upgrades) will be key to attracting buyers.