23-07-2025
Phoenix's Housing Market Unveiled: The "Twin Sword" of Skyrocketing Inventory Is Redefining 2025 – A Power Shift For Buyers, A Test For Sellers
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The Phoenix housing market is cooling off rapidly after a post-pandemic boom, but it isn't all gloom and doom for metro real estate agents. In fact, Rosenbaum Realty Group in suburban Gilbert argues the 2025 market is perfectly fine and shifting into a long-needed balance between buyers and sellers. Of course, folks selling homes naturally shine the most attractive light on mixed data, even though it suggests lower income in the decade's second half.
Phoenix's 1.6 million city residents translate into the fifth largest housing market in the U.S. while the surrounding metro raises that number to a healthy 4.8 million. City and metro housing inventory rose a whopping 54.3% year-over-year in the first quarter, with over 23,500 residences listed for sale. This marked a nine-year high for inventories, in which homes for sale surged 32% while new listings grew by 10.4%.
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Days on the market is tracking rapid inventory growth, rising to 53 days, which is slightly higher than the 51-day national average. However, it surged a whopping 20.5% in the last year, signaling a rapid slowdown. Other cities benefiting from the pandemic's "Zoom" migration are slowing down as well, particularly in Texas and Florida, so Phoenix's downtrend isn't surprising.
The growing inventory gives potential buyers more leverage, as the agent notes, contributing to a 2.9% year-over-year price decline. Home prices have fallen almost 7% since the 2022 pandemic peak but Phoenix population continues to grow, with analysts forecasting another quarter million residents through 2026. This in-migration has led to predictions for moderate home price gains of 3.5% to 5.5% through the same period.
Rosenbaum Realty sums up Phoenix's broad appeal, noting its "affordability compared to coastal metros like Los Angeles or San Francisco, with a cost of living only 6.3% above the national average. The agent also touts year-round sunshine, the diverse economy, including Intel (NASDAQ:INTC) and Taiwan Semiconductor Manufacturing (NYSE:TSM), and lifestyle amenities that appeal to residents fleeing higher-cost states.
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East Valley suburbs Mesa and Gilbert are the biggest losers in metro price depreciation so far, "down up to 15% in some segments," but the agency says "well-priced homes" are still selling at 98% of the listing price, on average. Even so, homeowners have lowered their asking prices in 31.3% of listings this year, highlighting a continued mismatch between the seller's optimism and the buyer's pessimism.
Rosenbaum Realty also says it's an attractive housing market for investors, with average rents rising 1.2% year-over-year to $1,646 per month. Stubborn mortgage rates above 6% have lessened affordability, especially for first time buyers. But that's good news for investors who need to keep their rental properties full of paying customers. It also markets the city and metro as a "landlord-friendly regulatory environment with no rent control."
Phoenix expects to add 60,833 new units by 2028, according to Rosenbaum Realty, but says that demand will continue to outstrip supply. This should slow or stop falling prices once buyers and sellers come into delicate balance. Of course, mortgage rates and the U.S. economy remain wild cards in this equation, with predictions for a recession that have yet to materialize.
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This article Phoenix's Housing Market Unveiled: The "Twin Sword" of Skyrocketing Inventory Is Redefining 2025 – A Power Shift For Buyers, A Test For Sellers originally appeared on
