May 2025 Market Update

The Greater Phoenix housing market isn’t delivering its usual sizzle this spring. Prices are falling. Sellers are conceding. Inventory is up. And showings? Sluggish. For buyers, there’s opportunity brewing. But for sellers, it’s starting to look like a long summer. What’s driving this sudden slowdown? And how far could home values fall? Let’s dig into what’s actually happening across The Valley and why this year feels so different.

Sellers Are Losing Their Edge

This spring hasn’t delivered the usual rush of buyers ready to pounce. Instead, listings are lingering. The shift is clear: supply’s up, demand’s cooling, and prices are reacting fast.

• Median price down to $446,000
• That’s a $19,000 drop in just five weeks
• Nearly 50% of sellers offering buyer incentives
• 10-year high in inventory
• Many homes seeing multiple price cuts
• Average days on market soaring

The market isn’t frozen. But it’s creaking. Homes that aren’t priced to compete are sitting. The message? The frenzy is fading, and buyers are back in control.

Also Read: Greater Phoenix Faces Disruption From Robot Home Builders

Luxury Market Feels The Chill

Even the top-end homes, usually immune to broader slowdowns, are losing steam. High-end buyers are hesitating. Confidence is thinning.

• 68 homes listed in Paradise Valley over $8M
• Just 18 closed year-to-date above $8M
• Zero $8M+ sales in Arcadia this year
• Tariff and stock market jitters adding pressure

The ultra-luxury segment isn’t crashing. But the euphoria is clearly gone. Today’s high-end buyers are choosier, slower, and far less willing to overpay.

Inventory Keeps Piling Up

Listings keep flooding in. Buyers? Still hesitant. That mismatch is pushing prices down.

• Active listings hit 26,673
• Up sharply from ~17,000 this time last year
• April had more new listings than any April in past 2 years
• Supply 6% above normal
• Demand 18% below normal

Sellers can’t rely on scarcity anymore. Buyers have options and time.

Also Read: Axon Campus Approved As Hobbs Signs Rezoning Fast-Track

Interest Rates Are Stuck In The Sixes

Rates haven’t budged much this year. The Fed made moves in 2024, but borrowing remains pricey. Without a bigger economic shakeup, don’t expect 4% anytime soon.

• Mortgage rates holding near 6.8%
• Fed cuts haven’t translated into buyer relief
• Long-term average for mortgage rates? Roughly 7%
• Big rate drops would require deep recession or Fed stimulus

Buyers who were waiting for sub-5% rates may be in for a long wait.

Affordability Shows Signs Of Life

There is a bright spot for buyers. Prices are falling faster than rates are rising. That’s finally nudging affordability in the right direction.

• Median monthly housing payment just under record highs
• Sellers cutting list prices early
• Buyers seeing more room to negotiate

It’s not a flood of affordability, but it’s a crack. And for those locked out recently, that matters.

Also Read: Home Builders Cut Prices & Boost Incentives In Greater Phoenix

Buyers Gaining Ground

Fewer bidding wars. More contingent offers. Negotiation is back. So are concessions.

• Buyers pushing for rate buydowns
• Sellers covering closing costs
• Bidding wars now rare
• Risk-averse buyers seeking contingencies
• Longer decision timelines

Sellers are adjusting to a new reality. And buyers? They’re moving with caution, not urgency.

Looking Ahead To Summer

The market’s not crashing. But the slowdown is real and could deepen.

• CMI (Cromford Market Index) now at 77.4 = solid buyer’s market
• Supply rising faster than demand
• Prices declining steadily into peak heat months

Unless something sparks stronger buyer confidence, like a surprise rate drop or economic clarity, this trend won’t reverse soon.