Phoenix Housing Market 2025: Active Listings Surge 12% as Buyer Demand Growth Slows

Since the beginning of this year, the active listing count has increased by 2,324, representing an 11.9% rise. This growth rate surpasses the 8.1% increase seen during the same period last year, and it builds upon a base of 19,460 compared to 14,593 in 2024. These figures indicate that the supply of listings is not only higher but also growing more rapidly than it was a year ago. This trend suggests that inventory is becoming increasingly abundant, adding pressure on the real estate market.

While listings under contract have also shown growth, the increase is less robust than last year. This year, listings under contract rose by 13.3%, from 5,387 to 6,103. By comparison, last year saw a much higher growth rate of 23.8% during the same period. The net gain this year of 716 listings under contract is significantly smaller than the 1,257 gained last year, marking a decline in the growth rate of demand by 44%. This slower rate of demand increase indicates a shift in market dynamics compared to the previous year.

The slower growth in demand combined with faster-growing supply creates a challenging scenario for sellers, particularly when compared to the more favorable conditions of January 2024. Key indicators illustrate this trend: the contract ratio remains below 30, currently at 28, compared to 41 last year; the percentage of final list price achieved has dropped from 97.40% to 97.15%; inventory days have risen from 92 to 123; and the listing success rate has fallen from 69.7% to 64.3%. These metrics collectively paint a discouraging picture for sellers, suggesting a less competitive market environment.

This market shift makes it more difficult for sellers to resist negotiation demands from buyers, especially as new competition rapidly enters the market. Pricing strategies will need to adapt, with sellers prioritizing competitive and realistic initial listing prices to attract buyers. Overpricing properties, particularly in the low and mid-range segments, could lead to longer marketing periods and deeper price cuts later. High-end luxury properties may face less immediate pressure due to their traditionally longer marketing cycles, but overall, the current market requires careful pricing and strategic positioning to navigate successfully.

"On matters of style, swim with the current, on matters of principle, stand like a rock."
– Thomas Jefferson

Have a great week everyone!