1) Prices are flat
In a typical “boring” market, home values often move slowly (more like an inflation-style grind than a rocket ship). Phoenix has not been boring since Covid, but the current phase is closer to “sideways.”
ARMLS marketwide data for December 2025 reported a $450,000 median sales price, and it was shown as unchanged versus 1, 3, and 12 months prior. That’s why many people describe the market as “stuck.”
Zooming out: the S&P CoreLogic Case-Shiller Phoenix index peaked at 343 in June 2022, (due to interest rate hikes causing panic, this was the peak of pricing) dropped to 321 by January 2024, to 325 in October 2025. That’s a “down a little, up a little, now flat” pattern for roughly 3.5 years.
In simple terms: a market adjustment is showing up in time (longer to sell) and terms (credits and repairs) than in huge price cuts.
This matters because most people don’t shop for a home by price alone. They shop by monthly payment. When rates and prices move fast, the payment becomes the constraint. Right now, a lot of sellers are stubborn and don’t want to cut the list price, so they pull the home and rent it out while they wait for peak-style offers to come back. On the buyer side, many buyers are nervous about overpaying because they keep hearing “crash” language. Again, both sides are feeling stuck.
The hard math: ARMLS showed the December 2020 median sales price at $333,000, up 14.9% year-over-year (which implies roughly $290,000 for December 2019). Compared to $450,000 in December 2025, that’s about $160,000 more for the median home. So if someone “waited for the crash” since pre-Covid, they didn’t just wait out headlines— they sat through a period where prices rose dramatically, and the best-rates (around 3%) came and went.
2) Inventory is higher, but most sellers are not forced to sell
Phoenix inventory levels are much higher than during the Covid shortage years. ARMLS reported 3.48 months of supply in the December 2025 STAT report.
Months of supply measures how long it would take to sell all homes currently on the market if no new listings were added. In Phoenix, under 3 months is considered a strong seller’s market, around 4–5 months is closer to balanced, and 6+ months typically signals a buyer’s market.
At 3.48 months, Phoenix is no longer in the extreme shortage seen in 2020–2021, but it is also not oversupplied. Buyers have more choices, yet inventory is still limited enough to prevent sharp price drops.
Many sellers also do not have to sell. Most homeowners hold mortgage rates far lower than what buyers can get today. Selling and buying another home often means taking on a much higher monthly payment. As a result, many owners delay listing unless a life event forces the move or pricing clearly makes sense.
3) Buyers are still here, and there is a lot of pent-up demand, but they are picky
Buyers did not disappear. They are slower and more selective because borrowing is more expensive. ARMLS reported a 63-day median DOM (days on market) in the December 2025 STAT report.
For comparison, during the peak of the Covid market in 2021, many Phoenix homes went under contract in less than 10 days, often with multiple offers. In 2019, it took about 62 days on average before going under contract. A 63-day median signals a market where buyers are taking more time, homes require sharper pricing and presentation, and negotiation plays a much larger role than it did during the frenzy. Something that pre-covid REALTORS® (ME!) have come to expect as a normal and balanced market.
- Moves fast: clean, move-in-ready, correctly priced
- Sits longer: overpriced, needs work, awkward layout, poor updates, bad photos
4) Rates changed behavior more than anything else
This market cycle is driven primarily by higher borrowing costs, not widespread job losses or forced selling. Freddie Mac’s Primary Mortgage Market Survey (PMMS) reported the average 30-year fixed mortgage rate at 6.16% as of January 8, 2026 (down from 6.93% one year earlier).
When rates move from the 3% range to the 6% range, the same home costs hundreds more per month. That payment shift changes behavior: buyers take longer to decide and negotiate more aggressively, while many sellers delay listing to avoid giving up lower-rate mortgages. The result is a slower market (vs Covid) with fewer impulse decisions, not a market collapse.
5) Leverage depends on the exact home, not the major news headline
Buyer vs seller leverage is decided house-by-house.
- Price point — higher monthly payments reduce the buyer pool
- Location — school quality, commute times, and neighborhood demand always matter
- Condition — buyers avoid repair-heavy homes when rates are high
- Seller motivation — whether the seller must move or has flexibility changes everything
Greater Phoenix market forecast for 2026
Phoenix market forecast: expect a market that rewards realistic pricing. AKA pricing that is accurate within your neighborhood, similar homes and in the same condition. Those who want to play the, "let's test the market and overprice the home" strategy will be punished by longer days on market, less showings, and buyers coming in harder with negotiations. If rates drift down, demand will improve. If rates move up, buyers get more selective and negotiation becomes more aggressive. The most common outcome in a market like this is not a dramatic swing, but steady movement with more back-and-forth, detailed negotiations.
Bottom line
Phoenix real estate trends in 2026 are defined by flat pricing, selective demand, and negotiation replacing the frenzy. That’s why the market feels frustrating for both sides: buyers want a better payment, sellers want yesterday’s peak price, and both are trying not to time it wrong.
I track the trends so you don't have to. As a Phoenix native and full-time, award-winning REALTOR®, I love chatting the market with you. Reach out anytime!
Contact AndreaAndrea Scheppe, PLLC • HomeSmart Phoenix – Arcadia
