Phoenix Metro Update - August 2025

Greater Phoenix Housing Market Update: Why Buyers May Want to Act Fast

The Greater Phoenix housing market has been anything but predictable this year. Since April, active supply has dropped sharply, buyer incentives are at record highs, and mortgage rates have taken a small but welcome dip. If you’ve been sitting on the sidelines, now might be the time to pay attention—conditions are shifting, and the current buyer’s market may not last much longer.

Step 1: Understand the Shift in Supply and Demand

Active supply has fallen 13.6% since April, driven by a surge in canceled and expired listings, alongside a shortage of new homes entering the market. July saw cancellations up 64% and expired listings up 69% compared to last year. Meanwhile, demand is rebounding—helped by a rate drop from 6.75% to 6.55% and a 14% bump in weekly accepted contracts since July 4th.

Step 2: Recognize Where Prices Are Moving

While median sales prices are flat compared to last year, asking prices are trending down—especially in condos and townhomes under $500K, which are down 5.9%. Single-family homes under $500K have slipped just 1.3%. Buyers have also been able to negotiate extra discounts: 2.5% off condo/townhome list prices and 1.3% off single-family homes in July.

Step 3: Take Advantage of Historic Concessions

Seller concessions—covering buyer closing costs or mortgage rate buydowns—are at unprecedented levels. In August, they’ve hit a record 58% of sales. For buyers, this means more negotiating power and reduced upfront costs.

Step 4: Keep an Eye on the Cromford Market Index

For the first time in months, the Cromford Market Index is reversing upward. If this trend continues, the days of a strong buyer’s market could be numbered. Acting now could mean getting the home you want without bidding wars—and while seller incentives are still on the table.

Step 5: For Sellers—Patience is Key

Even with signs of improvement, this is still a buyer’s market. Median days on market are the highest in at least 11 years—48 days overall, and a staggering 69 days for condos (79 days for condos under $250K). Prices may not bottom out until 3–6 months after the market reaches balance, so timing your sale is critical. Waiting could mean faster activity later, but possibly at a lower price.

Step 6: Watch the Bigger Economic Picture

Large banks like Chase and Goldman Sachs now see a 30–43% chance of a recession soon. If unemployment rises, the Federal Reserve may be forced to lower rates, potentially sparking more buying activity in Q4. Ironically, a mild recession could provide relief for weary sellers and open more opportunities for buyers.

Conclusion: The Window May Be Closing

Buyers today are in a rare position—low competition, high concessions, and room to negotiate. Sellers must remain patient, as economic shifts could rapidly alter the landscape. If you’re considering making a move in the Phoenix Metro area, now’s the time to strategize before the balance shifts.

If you’d like tailored advice for your buying or selling plans, feel free to reach out to Bret Johnson 📞 602-502-6468 or 📧 bret@renetgroup.com at Realty Network Group at REAL Broker.
Reference:

Commentary written by Tina Tamboer, Senior Housing Analyst with The Cromford Report
©2025 Cromford Associates LLC and Tamboer Consulting LLC