News Summary
The Phoenix housing market is seeing a transition towards a buyer-favorable environment with falling home prices and increased inventory. The median sale price dropped by 0.2% year-over-year to $451,100 in June. Following a peak in June 2022, home prices have decreased by 6.9%. Inventory levels have surged, giving buyers more options and negotiating power. Despite high mortgage rates and declining sales, analysts predict further price corrections. Rising concerns over affordability and homelessness persist, although there remain opportunities for first-time buyers in this changing landscape.
Phoenix
The Phoenix housing market is experiencing a shift towards favoring buyers as home prices decline and the inventory of available homes surges. The median sale price of homes in the metro Phoenix area fell by 0.2% year-over-year, reaching $451,100 in June. This decline marks a significant change in a market that previously boasted solid gains.
Home prices in the Valley have largely stabilized or slightly decreased since 2025, as elevated mortgage rates continue to create affordability issues for potential buyers, reducing demand in the market. This year, home prices have dropped by 6.9% from their peak in June 2022, indicating a broader price correction in the area.
One of the main factors contributing to this shift is the substantial increase in the supply of homes available for sale in the Phoenix area, which has augmented buyers’ options and given them more negotiating power. Currently, there are 18,701 homes for sale in the Phoenix-Mesa-Chandler metro area, representing the highest inventory level since 2017. This dramatic rise in listings, which have increased by 53% over the past year, follows a period of low inventory during the pandemic.
March statistics underscore the changing dynamics: home sales in the Phoenix metro area totaled 6,400, reflecting a 20% decline from the long-term average and a 35% drop from the pandemic’s peak levels. Furthermore, homes are taking longer to sell, with the average time on the market increasing to approximately 78 days in recent months, compared to 67 days in April 2024. Additionally, home values in the metropolitan area decreased by 1.3% compared to the same time last year.
As buyers regain some leverage, they are demanding more from sellers, including renovations and repairs before purchase. This situation has led to some sellers struggling to accept the current market valuations of their homes. In April, the Valley’s median home price fell to $445,000, reflecting a $10,000 drop from March.
Market Trends and Future Outlook
Real estate analysts maintain that the Phoenix housing market is approaching an inflection point, with predictions for further declines in home prices. Current estimates suggest a potential 20% correction if inventory levels continue to rise while sales remain low. Despite a challenging market characterized by high mortgage rates of around 7%, there has been some evidence of increased buyer activity, particularly in April compared to March.
Concerns persist regarding housing affordability, particularly with the rising homelessness rates among older adults in Maricopa County. Analysts indicate that home prices may currently be 18% overvalued compared to historical averages, compounding the affordability crisis facing many residents.
The economic mentors have pointed towards an optimistic long-term outlook for the Phoenix area, largely due to the influx of high-paying jobs and overall economic growth. Within this context, there may also be purchasing opportunities for first-time homebuyers and others whose financial circumstances have improved over the past five years. The surrounding regions, including Mesa, Goodyear, and Buckeye, also provide significant acquisition possibilities, suggesting varied opportunities in the broader housing market.
As the Phoenix housing market continues to adjust, potential buyers may find themselves in a more favorable position than in recent years, particularly as the balance of power shifts from sellers to buyers amid increasing inventory and declining prices.
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Additional Resources
- AZ Big Media: A Return to Sanity in the Phoenix Housing Market
- Wikipedia: Phoenix, Arizona
- Newsweek: Phoenix Housing Market Faces Mass Sell-Off
- Google Search: Phoenix housing market
- AZ Central: Buyers Finally Have Upper Hand in Phoenix Housing Market
- Encyclopedia Britannica: Real Estate
- HousingWire: Realty Executives International Unifies Arizona Operations
- Redfin: Is Now a Good Time to Buy a House?
