Market Update May 5th, 2025

There was a pronounced shift in the composition of single family detached home sales in Greater Phoenix between March and April. Overall the lower end of the market gained momentum as buyers gravitated toward more affordable properties. Sales of homes priced up to $500,000 rose by 11.3% while the midrange segment from $500,000 to $1,000,000 dipped slightly by 1.0% and the luxury tier above $1,000,000 contracted by 11.2%. This redistribution of activity laid the groundwork for broader changes in market pricing and volume.

Within the under $500,000 category, two sub-ranges stood out. Homes priced between $450,000 and $500,000 led the pack, growing 16.6% month over month. Close behind properties in the $350,000 to $400,000 band saw a 15.5% increase and accounted for the largest share of unit volume with 874 closings in April. These surges underscore how buyers have refocused on well-priced entry-level and workforce housing in response to rising borrowing costs and shifting affordability thresholds.

At the very top of the spectrum, the impact was more uneven. The $3 million to $5 million segment experienced the steepest decline,e with transactions plunging by more than 35%. By contrast, the ultra luxury market homes priced above $7.5 million remained static with 12 closings recorded in both March and April. This bifurcation highlights that while some high-end buyers remain active,e many are pausing or recalibrating their purchase plans amid broader economic uncertainties.

These mix-driven shifts translated into notable changes in average and median sale prices. The average single-family home price fell nearly 6% from $695,693 to $654,990 while the median slipped almost 4% from $494,000 to $475,000. Although much of this downward pressure stemmed from a heavier concentration of lower-priced transactions, individual price strength softened across most segments. For example, townhomes and condominiums, which occupy a narrower price band, saw their average sales price decline by 1.3%, signaling that competitive dynamics have cooled even where product types are more homogeneous.

“Every strike brings me closer to the next home run.”
- Babe Ruth

Have a great week, everyone!