Phoenix Market Slides Again - More Decline Expected

[Ken M.]

Phoenix Housing Market Enters Correction Phase After June Brings Price Drops

The Greater Phoenix housing market continued its gradual reset in June 2025, signaling a clear shift in momentum from sellers to buyers according to a report from The Ravenscroft Group. Home prices dipped modestly, builders ramped up incentives, and buyers found themselves in the strongest negotiating position in years—marking a pivotal moment for one of the nation’s hottest real estate regions.

While not a repeat of the 2008 housing crash, market data shows a softening across key indicators, as elevated mortgage rates, seasonal slowdowns, and affordability pressures weigh on demand.

According to the group, the median sales price in Phoenix edged down to $449,500, a 0.3% dip from May’s $451,000. Phoenix’s Market Index—a measure of supply vs. demand—fell to 71, further cementing the area’s tilt toward a buyer’s market.

With 30-year fixed mortgage rates hovering around 6.89%, homebuilders are stepping in to maintain momentum. Many are offering interest rate buydowns into the mid-3% range, along with generous closing cost credits, appliance packages, and landscaping perks. This reality has made new construction homes particularly appealing to buyers, many of whom are priced out of the resale market due to borrowing costs.

Real estate trends varied across the Valley in June. Buckeye saw the steepest price shift at -8% while Fountain Hills and Phoenix proper each declined by -6%. Cave Creek transitioned into buyer’s market territory, and Avondale moved from a seller’s to a balanced market.

As of June, the groups says 2 cities are in seller’s markets, 7 cities are considered balanced, and 9 cities have shifted into buyer’s market territory. Outlying cities like Arizona City, Casa Grande, and Gold Canyon lean even more heavily toward buyers.

High recurring costs—such as HOA dues and special assessments—are driving buyers away from attached housing. The listing success rate for condos and townhomes dropped to 58% in May, the lowest since 2011. Manufactured homes fared worse, with fewer than half of listings resulting in a sale.

https://azfreenews.com/2025/08/phoenix-housing-market-enters...

[Doug Smith]

Just had an appraisal come back on a DSCR deal on Florida's East Coast showing a 26.6% drop in prices in that market over the past 12 month. My initial reaction was "that's outrageous" and I started pulling my own comps to torch the appraisal. As I did my research, however, I think the appraiser got that part right. I still think they lowballed the appraisal a bit and cherry picked comps, but I don't think I was prepared for the reality of the market drop on the Space Coast of FL. Good post and definitely something to be mindful of.