🏜️ Phoenix Housing Market Update – June 2025

Source: The Cromford Report

As we head into the summer season, the Phoenix housing market continues to present a tale of two markets—one of rising supply and another of softening demand. Here’s what the numbers from June 1, 2025, are telling us and what it means if you’re thinking of buying, selling, or investing.

📊 Key Stats: June 1, 2025 vs. June 1, 2024

Data courtesy of The Cromford Report

📈 Inventory Growth Slows—But Still High

For most of 2025, active inventory seemed to be growing non-stop. But in late May, that trend finally hit pause—not because of demand, but because fewer homeowners are listing their properties. Without that drop in new listings, today’s supply would be even higher.

Still, year-over-year inventory is up 47%, giving buyers more choices—especially in the mid-range price points that were once fiercely competitive.

📉 Demand Continues to Cool

Unfortunately, the number of homes going under contract declined by 12% month-over-month and nearly 5% year-over-year. Pending sales fell 14% compared to May.

May 2025 had only 20 working days, compared to 22 in May 2024. So while closings dipped by 6.6%, that actually reflects a decent pace on a per-day basis. Escrow teams, agents, and lenders are still getting the job done efficiently.

💸 Prices Are Stable—But Skewed by Luxury Sales

• Avg. Price/Sq. Ft.: $300.14 (up 0.8%)
• Median Sales Price: $455,000 (up 2.2% from last month)

This mild price growth isn’t necessarily driven by market strength. Instead, luxury homes made up a higher share of sales in May, giving average and median prices a lift. Entry-level and mid-tier homes, on the other hand, saw weaker volume.

Sellers should be cautious about interpreting these price gains as a sign of momentum.

🛠️ Buyers Want More Than Repairs—They Want Renovations

One of the more striking shifts in today’s market is buyer psychology. With fewer homes going under contract and little competitive pressure, buyers are now demanding not only repairs but full-blown upgrades. Common requests include:

• New interior/exterior paint
• Roof replacements
• New HVAC systems
• Updated kitchens and bathrooms

And desperate sellers—especially those who've lingered on the market—are starting to say “yes.”

If you’re a seller, you need to be strategic. Smart, targeted updates and proper pricing are critical to staying competitive.

🏦 Mortgage Rates Still Hovering Near 7%

Interest rates haven’t budged much. Fixed 30-year rates are stuck around 7%, and while some buyers are adapting, others remain hesitant.

Builder Incentives Alert: Many builders are offering 4.99% rate buy-downs and other perks—especially at quarter’s end. If you're considering new construction, now is a great time to negotiate.

📉 The Cromford® Market Index Drops to 73

A balanced market sits at 100. With a reading of 73, buyers clearly have the upper hand. This isn’t a crash, but sellers need to price carefully and understand they’re operating in a very different environment than 2021 or 2022.

💎 The Luxury Market Breaks the Mold

Luxury homes over $3 million had a strong May, with demand boosted by gains in the stock and crypto markets. Inventory in this segment actually dropped.

These buyers are often paying cash and buying second homes, largely unaffected by mortgage rate fluctuations. It’s a separate world—and it’s moving to its own rhythm.

🔮 Looking Ahead: Will Listings Stay Low?

The next few weeks will depend on new listing activity:

• If new listings stay low, that will help absorb some of the excess inventory.
• If new listings jump again, sellers could be in for tougher competition.

At the moment, we’re dealing with more supply than demand. Until that shifts, sellers need to be aggressive, flexible, and prepared.

🏁 Final Thoughts

The Phoenix market is cooling—but not crashing. We’re seeing:

• Inventory up 47%
• Fewer homes under contract
• Stable (but fragile) prices
• Buyers requesting renovations
• Mortgage rates stuck near 7%

For Sellers: Make your home stand out. Focus on presentation, necessary updates, and smart pricing.

For Buyers: You have time and leverage. Explore incentives, negotiate repairs, and be patient.

📬 Need help navigating this market? Let’s talk. I’m here to help you make smart real estate moves in 2025 and beyond.