Phoenix Housing Market Shifts Toward Buyers as Supply Grows

Over the past month, the Greater Phoenix housing market has continued to shift in favor of buyers. Fifteen of the eighteen major cities have moved in a more buyer-friendly direction, while only three, Tempe, Gilbert, and Buckeye, have become more favorable for sellers. Cave Creek, Peoria, and Avondale led the movement toward buyers, while the other twelve buyer-leaning cities saw more modest shifts of 6% or less.

The average change in the Cromford Market Index (CMI) was -2.6%, a slight improvement over last week’s -2.8%, signaling that although the trend continues to benefit buyers, it is starting to decelerate. As a result of this momentum, we now have 6 cities classified as seller’s markets, 5 as balanced, and 7 as buyer’s markets a significant shift from earlier in the year when sellers held more widespread advantage.

The primary driver behind this shift is increasing supply. More listings are hitting the market at a time when demand has yet to fully rebound. Although mortgage rates have started to decline slightly, creating a more favorable environment for buyers, demand remains sluggish. This gap between supply and demand has tilted negotiations more in favor of buyers, especially in areas where inventory continues to grow.

While falling mortgage rates are a welcome sign for the market, they haven’t yet sparked a major surge in buyer activity. Demand remains roughly 20% below normal levels, and it’s difficult to predict when or if it will catch up. However, if seasonal trends hold true and supply peaks by mid-November, sellers could see a temporary reprieve in competition as new listings taper off during the holiday season.

"It does not matter how slowly you go as long as you do not stop."
-Confucius

Have a great week, everyone!