Phoenix Market Update - March 2025

It’s a Buyer’s Market. Why Aren’t Prices Crashing?
by Becky Trujillo | March 14, 2025

The Phoenix real estate market has officially entered a buyer’s market, yet home prices remain stable. While some may expect a price crash, the reality is more complex. Let’s dive into why home values are holding steady and what this means for buyers and sellers.

For Buyers: Patience is Key

Phoenix has been in a buyer’s market for three out of the last four months, yet home prices are still up 4.3% from last year. Why? Because price shifts take time.

• Market Shifts Take 3-6 Months to Show in Prices – A home sale takes time to finalize. First, sellers list their homes, then wait 30-45 days to go under contract and another 30-45 days to close. Only after this process do we see recorded price changes.
• Recessions Don’t Always Equal Crashes – Many fear a repeat of 2008, but historically, recessions cause home values to stagnate or rise slightly rather than collapse. Lower mortgage rates often drive buyer demand up during economic slowdowns.

That said, some price drops are happening in specific price points:

• Condos & townhomes under $400K are down -4.2% this month.
• Luxury homes ($1M-$1.5M) are up +5.5%.

For Sellers: More Listings, More Competition

The current market isn’t struggling due to a lack of buyers—the growing supply of homes is putting pressure on sellers.

• More Homes on the Market – The Arizona MLS has seen the highest number of active listings since 2015, making it more competitive for sellers.
• Price Reductions Are Up 58% – With more choices, buyers have stronger negotiating power.
• Sellers Are Offering More Incentives – Some are staging their homes, repainting in neutral tones, or upgrading appliances to stand out.

What’s Next?

Mortgage rates have dropped from 7.26% in January to 6.78% today. If they continue declining below 6.5%, we could see more market activity benefiting buyers and sellers.

Whether you’re looking to buy or sell, now is a strategic time to plan your next move. Have questions? Let’s connect!

Reference:
This summary is based on insights from Tina Tamboer, Senior Housing Analyst with The Cromford Report.
©2025 Cromford Associates LLC and Tamboer Consulting LLC