Phoenix Real Estate Market Weakens Again as Buyer Leverage Grows

The Greater Phoenix housing market continues to shift in favor of buyers, though the rate of deterioration has slowed for sellers. The average change in the Cromford® Market Index (CMI) now sits at -2.5%, a slight improvement compared to last week's -3.1%, marking the third consecutive week of reduced decline. Only four cities have improved for sellers over the past month, one fewer than last week. Paradise Valley leads the positive movers with a 7% increase, while Surprise and Goodyear show marginal gains. Fountain Hills, though still up compared to a month ago, has started to trend downward in recent weeks.

On the flip side, the remaining 13 cities have become more favorable to buyers. Scottsdale and Phoenix are the biggest drags on the market with 8% declines, which is significant given their weight in dollar volume. Gilbert and Chandler are close behind with 6% drops, while other cities have seen more modest changes of 4% or less. Despite these declines, Paradise Valley has bucked the trend, moving from a balanced market to a weak seller's market. In total, the region now has four seller’s markets (all weak), eight balanced, and seven buyer’s markets.

New listing activity has notably slowed. Over the past four weeks, only about 8,200 new listings have hit the market, a steep drop from the 10,000-plus seen during the spring months. This slowdown has helped ease some supply pressures, with the Cromford® Supply Index starting to edge downward. Still, demand remains weak, and while inventory is not excessive by historical standards, it is more than enough to tip the scales in favor of buyers, particularly outside of the luxury segment. Comparisons to the 2006-2011 crash period remain unfounded, as the supply environment today is far more stable.

Single-family detached homes continue to outperform condos and townhomes, where rising HOA fees and maintenance costs are scaring off buyers. These recurring expenses have grown faster than general inflation, contributing to softer prices in that segment. However, luxury condos are faring better, supported by out-of-state buyers looking for second homes or vacation properties. Overall, sellers need to remain flexible and strategic in pricing, while buyers continue to gain leverage in negotiations across most of the market.

"Quality is not an act; it is a habit."
-Aristotle

Have a great week, everyone!