Phoenix Market Shifts as Buyer Power Grows and Inventory Climbs

The Greater Phoenix housing market is shifting once again, and this week’s update brings several key changes. First, the list of major cities has expanded to 18, as Queen Creek has now been split into Queen Creek (ZIP 85142) and San Tan Valley (ZIPs 85140, 85143, 85144). San Tan Valley now stands as the most populous municipality in Pinal County, warranting its own analysis moving forward. Alongside that, red flags are increasing for sellers: 11 of the 18 tracked cities have moved in favor of buyers over the past month. The average change in the Cromford Market Index (CMI) was -1.1%, marking a reversal from last week’s slight gain. Buyer-favorable cities include Cave Creek, Paradise Valley, and Avondale, while Tempe and Gilbert were the only cities to show more than 5% positive movement for sellers.

One of the biggest challenges for sellers is the rising number of active listings. Over the past week alone, listings without a contract rose by 1.85%, and total active inventory (including UCB/CCBS) is set to exceed 28,000. Stable interest rates in the 6.34%–6.38% range aren’t stimulating enough buyer activity to keep up with this growing supply. Entry-level home inventory far exceeds demand, placing first-time buyers in a powerful negotiation position, though many may lack the experience to capitalize without expert guidance. At the luxury end, high-net-worth individuals, bolstered by gains in stocks and crypto, are driving demand for now. However, any dip in financial markets could abruptly slow luxury home purchases. Homebuilders are already adjusting, pulling back on construction and quietly offering price cuts on move-in-ready homes. The rapid drop in builder stock prices this week may signal more pressure ahead.

“Coming together is a beginning. Keeping together is progress. Working together is success.”
—Henry Ford

Have a great week, everyone!