Is Phoenix’s Housing Market at Risk?
Every month, Barb Savor, Director of Operations at The Cusick Group, releases the Phoenix Real Estate Scoop, where home buyers and sellers can find hyper-local market data. This month, we’ve decided to share the love on our blog! Details about joining our mailing list can be found at the end of this article. Now, onto the Phoenix market insights.
With high interest rates and slower sales, talk of a housing crash continues. However, Phoenix’s market remains steady. While prices and sales have plateaued recently, this aligns with normal seasonal trends. A strong job market, rising incomes, and continued population growth provide stability.
Ali Wolf, Chief Economist at Zonda, highlights Phoenix’s appeal due to low taxes, a growing economy, and an attractive lifestyle. Although a LendingTree poll found that 38% of Americans fear a market crash in 2025, Phoenix’s economic fundamentals suggest otherwise.
Why Phoenix’s Housing Market Remains Resilient
Phoenix ranked No. 3 for population growth in 2023, adding over 92,000 new residents. Another 80,000 are expected to move in during 2024, according to the US Census Bureau. The job market is thriving, with 55,000 jobs created during the 12 months that ended in October 2024. High-income job growth ranks second in the nation.
The median household income in the Valley rose to $88,900 in 2024, up from $60,000 in 2017. Homeowners have gained $300 billion in equity over the past five years, with home prices increasing 89%. Additionally, Phoenix ranks third in the country for new home construction, with 28,000 new houses and 17,000 apartments permitted in the last year.
What’s Next for Phoenix’s Housing Market?
The National Association of Realtors (NAR) projects Phoenix will be a top 10 housing market in 2025. The median home price climbed by $8,000 from September to October, reaching $448,000. Home sales remained steady at 5,708 transactions in October.
Foreclosures are low, with just 67 homes lost in October. President Sindy Ready at the Arizona Association of Realtors anticipates stable interest rates will encourage more buyers and sellers to enter the market in 2025.
Year-Over-Year Market Comparison
Q4 is typically the slowest season for home sales, while Q1 and Q2 see increased activity. Comparing January 2024 to January 2025, inventory rose by 28%, yet demand has remained consistent.
The metro area now has 5.2 months of inventory, nearing the balanced market threshold of 5.5 months. The average list-to-sale price ratio is 97.09%, reflecting accurate pricing by sellers and agents.
The listing success rate declined from 69.8% to 62%, meaning 38% of homes did not sell. The contract ratio, which measures the number of sales contracts relative to supply, fell from 45.3 to 31.7. A rising contract ratio would indicate a strengthening market.
Conclusion
For hyper-local phoenix market insights and data, contact Barb by clicking here. If you’d like to join our mailing list to receive the Phoenix Real Estate Scoop, click here. We’re here to help you navigate the Phoenix real estate market with confidence.
As always, if you are interested in working with our team on your next real estate endeavor, please contact us today at 480-759-1576. For additional information, visit us at Cusickgroupre.com. We look forward to talking to you about your real estate goals!
