Phoenix Real Estate Market Update – Fall 2025

Maybe “fall” is a stretch for Arizona’s climate but Halloween costumes hit the Costco shelves a month ago, so let’s go with it. The Phoenix real estate market is starting to show signs of movement as we look ahead to cooler months. Supply is now dropping and demand is inching higher, reversing this years trend, but overall levels remain below what would be considered a balanced market in most areas of the valley.

Not surprisingly, the strongest performance is being seen in more affluent areas like Scottsdale, Paradise Valley, Fountain Hills, and Cave Creek where activity has picked up more noticeably. These markets are showing healthier demand compared to many other parts of the Valley, which could be a combination of seasonal factors and the unique resilience of high-end buyers.

A few factors are driving these shifts:

• Seasonal Increase: Fall often brings more activity after the slower summer months in Phoenix, as cooler weather attracts buyers who delayed their search and fled for cooler temps during the summer months.
• Limited New Listings: Fewer homes are hitting the market over the last several months, which is helping reduce excess supply and stabilize pricing. The market has around 20,000 homes available, down from a 25,000 high earlier this year.
• Mortgage Rates Trending Down: Slight decreases in rates have nudged some buyers off the sidelines, boosting demand just enough to add a touch of momentum.

Overall, while the market still favors buyers, we’re seeing the early signs of a shift. If inventory continues to tighten and rates trend lower, we may be moving toward a more competitive environment—especially in desirable, higher-priced communities.

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Data Snapshot – Phoenix Housing Market

• Active Listings: With 20,000 homes on the market, inventory is still up from 16,000 at this time last year, but down from the 25,000 we saw during the early summer months.
• Closed Sales: August saw 5,333 homes close, slightly edging out 5,230 in August of last year.
• Under Contract: Amount of homes under contract in August is up by 18% compared to last year, evidence of increased demand.
• Median Sales Price: Holding steady at $445,000, compared with $448,000 at this time last year.
• Mortgage Rates: Recently rates are averaging 6.5%, down from summer highs closer to 7%, providing some relief for buyers and we’re already seeing an increase in demand.

While this recent reverse in the market index (supply and demand) is certainly encouraging for home sellers to see…

…we must zoom out to grasp the fairly small amount of change this represents thus far. Nonetheless, this signifies a palpable shift in the market and the first sustained period of market improvement this year.