By Sean Colón
The Greater Phoenix real estate market is showing early signs of transition, but not in ways many expected. For Arizona realtors, the second half of 2025 presents both opportunities and challenges as inventory, pricing, and demand begin to shift. Understanding these trends is key to guiding clients with confidence.
Buyers Are Back in the Game
Since April, active supply has dropped 13.6%, driven by a surge in cancelled and expired listings and not enough new homes coming online. July alone saw cancellations rise 64% year over year and expired listings jump 69%.
At the same time, demand is quietly recovering. A dip in mortgage rates from 6.75% to 6.55% since July 4th has fueled a 14% increase in weekly accepted contracts. Buyers who were sitting on the sidelines are beginning to reenter, and affordability is improving.
Concessions remain a powerful motivator. In July, 56% of closed sales included seller-paid costs or rate buydowns, with early August numbers already hitting 58% — a record high. This is a critical talking point for Arizona realtors: buyers today have more leverage than they may for the rest of the year.
Price Trends: Condos Feel the Pressure
Despite a flat median sales price compared to last year, asking prices tell a different story. When measured by price per square foot, asking prices are falling — particularly in the condo and townhome segment.
Condos/townhomes under $500K are down 5.9% year over year
Single-family homes under $500K are down only 1.3%
Buyers in July negotiated an additional 2.5% discount off final list prices for condos and 1.3% for single-family homes. For realtors, this means framing condos as a smart entry point for buyers looking to maximize concessions and price reductions.
Why the Buyer’s Market May Not Last
For months, Phoenix has been firmly in buyer’s market territory. But the tide is starting to shift. The Cromford Market Index has begun to reverse course, signaling that supply is tightening while demand stabilizes.
This matters because pricing typically lags market balance by three to six months. If balance is achieved this fall, the bottom of home prices could appear as early as February or March. Realtors should advise motivated buyers to act now, while they can still secure concessions and avoid bidding wars.
Sellers: Patience Is Still Required
For sellers, the landscape remains challenging. July and August are showing a median marketing time of 48 days to contract — the longest July timeline in over a decade. Condos are especially sluggish, with a median of 69 days, and even entry-level condos under $250K are averaging 79 days before going under contract.
This extended timeline will likely persist through year-end. Realtors should prepare sellers for the reality that price growth will not appear until the market returns to seller’s market conditions. Waiting until spring may result in more activity, but also at lower price points.
What Could Change the Equation
Ironically, the next major catalyst for the housing market could be a national slowdown. Major banks — including Chase, Goldman Sachs, and Deutsche Bank — are forecasting a 30–43% chance of recession in the near term.
Why does this matter for Arizona real estate? Rising unemployment would put pressure on the Federal Reserve to ease monetary policy, halt balance sheet reductions, and potentially lower rates. That shift could drive mortgage rates down again, unlocking more contracts in Q4 and offering sellers some relief.
What Arizona Realtors Should Do Now
For buyers: Highlight the unique window of opportunity for concessions, reduced competition, and favorable pricing.
For sellers: Set expectations around time on market, price adjustments, and the trade-offs between selling today versus waiting for spring activity.
For investors: Position condos and townhomes as undervalued assets with higher negotiability compared to single-family homes.
The Arizona housing market in 2025 is all about timing. Realtors who help clients understand these dynamics will not only build trust but also position themselves as the go-to market expert in Greater Phoenix.
One of the simplest ways to elevate your listings is with high-quality visuals that tell each home’s story. If you’re ready to stand out in Arizona’s competitive 2025 market, let’s connect. Visit my website to learn more about my real estate photography services that help Arizona realtors sell faster, attract more offers, and win more listings.
By the way, I help realtors improve their online and social media presence by providing beautiful photos of their listings. That is why I’ve created this FREE HOME PREP LIST for your clients to help your listings look their best. Feel free to share.