If one thing's true about real estate, it's that it's a fickle giant — one moment it's a seller's market, the next it shifts in favor of buyers. While shifts typically take time and vary by region, real estate's dynamics can change faster in response to economic or political changes. The Phoenix housing market is currently experiencing a significant shift. Prices have dropped 6.9 percent from their peak in June 2022, showing a consistent downward trend.
What does this mean to the housing market, and how will it affect the rest of the year 2025? Let Mosaic Property Management show you the latest stats and trends, and see if investment property in the Phoenix metropolitan area is the right move for you this year.
Phoenix, AZ—a Buyer's Market?
Phoenix ranks as one of the top areas with the largest seller surplus. New listings in the Phoenix-Mesa-Chandler metro are up 20 percent year-over-year, with 18,701 homes currently for sale — the highest since 2017. And the median home price has risen slightly, from $479,000 during the same period last year to $485,000.
However, home prices and mortgage rates remain high despite having more sellers. This keeps many buyers out, especially first-time homebuyers. This inventory growth is leading to a longer selling window and contributing to seller anxiety, as many homes remain unsold.
Phoenix realtors believe that Metro Phoenix is experiencing a buyer's market, with sellers outnumbering buyers nearly 2 to 1, and active listings increasing 50 percent from last year. Sellers are even offering incentives like covering closing costs or reducing prices to attract buyers, with over 32,000 homes for sale.
According to the data from local experts, the Phoenix Valley is showing signs of shifting toward a buyer’s market, but it hasn’t fully arrived. Tina Tamboer, a senior housing analyst at The Cromford Report, agrees with this assessment as she predicts a 3–5 percent drop in home prices, suggesting some buyer demand movement. However, she points out that this is an adjustment—more like a gradual normalization after the explosive growth during the pandemic—and advises buyers not to expect major price declines.
Mark Stapp, who is based at Arizona State University, also notes that Phoenix has about 3.6 months of active listings, whereas a true buyer’s market has 5–6 months. He asserts that prices are not falling but are just becoming more realistic.
Strategies for Success
Timing the market is crucial, as it influences buying and selling decisions. Buyers should focus on lower costs, while sellers should capitalize on higher prices.
A Seller's Market
Sellers in this condition have strong negotiating power. Since high demand and low inventory often lead to faster home sales and above-asking-price offers, they can sell at competitive prices while still retaining leverage in negotiations.
A Buyer's Market
Buyers have more negotiating power in this phase because a higher number of available homes gives them a wider selection and increased leverage during sales. They can request concessions, better terms, and lower prices. The slower pace also provides them with the avenue for thoughtful decision-making and due diligence.
Since the data points to Phoenix leaning more to being a buyer's market in certain areas, here are some tips for buyers eyeing buildings in the city:
Learn to negotiate aggressively and aim for lower prices, closing cost assistance, and favorable terms.
Don't rush when evaluating multiple listings. Then, make well-researched offers during sales.
Acquire rental properties. Watch your acquisitions as lower acquisition costs improve rental cash flow.
Options for Property Investors
For investors, a seller's market is an ideal window to offload estates that may not perform well long-term. Because cash-rich buyers create competitive environments, investors can benefit from faster exits.
On the other hand, a buyer's market gives them better buying opportunities for distressed or undervalued estates. There's a wider window for them to evaluate and secure long-term profitable investments. And because there's less competition, they can develop more strategic planning and negotiate better deals.
Phoenix Real Estate Trends
Various data analyses and expert reports have led to the conclusion that the Phoenix real estate is stabilizing. It has shifted from a seller’s market to a more balanced landscape in the year 2025.
Economic and Demographic Factors
Phoenix remains affordable with a great climate and quality of life, making it attractive to people who migrate from expensive coastal cities. Even though rising mortgage rates impact buyer demand and slow home price growth, Phoenix can still support housing demands because of its strong job market, fueled by a number of expanding businesses, a growing tech presence, and a growing preference for remote work.
Luxury Market and High-Demand Areas
As of mid-2025, Phoenix's luxury real estate is flourishing, with more than 100 estates costing over $10 million. Demand is being driven by wealthy homebuyers who live in affluent communities such as Paradise Valley and North Scottsdale. Other popular neighborhoods with distinctive amenities for well-off people are Scottsdale, Arcadia, North Central Phoenix/Biltmore, and the reviving Downtown Phoenix.
Investment Outlook and Rental Opportunities
Due to consistent renter demand and comparatively cheaper house prices than coastal regions, Phoenix continues to be a desirable place to invest in rental estates. While focusing on regions with room to grow, investors and Phoenix realtors should carefully consider rental yields, taxes, upkeep, and local laws. With Maricopa County median price values predicted to reach $650,000 by 2030, the housing market is anticipated to grow in the long run.
What to Expect in 2025
The Phoenix housing market is expected to remain stable through 2027. In addition, Phoenix has the potential to be lucrative with the city’s active tourism, a growing population, and a booming economy.
The Phoenix area is expected to continue to grow and develop, with new neighborhoods and communities emerging. In order to make opportune decisions that are in line with your investing objectives, you should be adaptable and knowledgeable about real estate matters. You can strategically reduce the risks connected with market changes by maintaining a well-balanced portfolio that includes assets in several classes or locations.
Do you need help managing the real estate investments you've acquired in Phoenix? A competent property management company like Mosaic Property Management is your solution. Contact us today for a consultation and a free rental analysis!
FAQs
1. Will housing prices drop in Arizona in 2025?
Yes, housing prices in Arizona, particularly in Phoenix, are expected to continue trending downward in 2025. Experts predict a gradual price correction of about 3–5 percent, with the possibility of up to a 20 percent correction if active listings rise and home sales stay low.
2. Is it a buyer's or seller's market in Phoenix?
As of 2025, Phoenix is shifting toward a buyer’s market. There is a growing surplus of new listings—sellers outnumber buyers nearly 2 to 1—and rising inventory is giving buyers more negotiating power. However, some experts note the market has not fully transitioned and is still stabilizing.
3. Is 2025 going to be a buyer's or seller's market?
In 2025, the Phoenix housing market is leaning more toward a buyer’s market due to increased new listings, slower home sales, and declining home prices. Buyers have more leverage for negotiation, while sellers are adapting to longer selling windows and may offer incentives to attract purchasers.
4. Are Phoenix home prices dropping?
Yes, Phoenix home prices have dropped approximately 6.9 percent from their peak in mid-2022 and are down 2.9 percent compared to last year. This downward trend reflects an adjustment rather than a crash, with prices becoming more realistic amid rising mortgage rates and increased inventory.