January 2025 Arizona Housing market update
As we approach the spring season, let’s take a look at what to expect for 2025, reflect on 2024, and explore the current trends in the Arizona housing market. If I were to summarize the present market conditions, I would describe it as a slow-moving landscape with low demand, resulting in a rare buyers’ market. Sales volumes have been subdued, though luxury properties priced above $3 million have shown promising performance. Chandler, Arizona, stands out as the top market, with prices remaining relatively stable. The anticipated decline in interest rates is expected to spark a market rebound, fueled by the ongoing housing shortage, an influx of new residents, and a strong business environment.
Here are some more key features describing this market.
Buyer Activity in Spring
Spring traditionally brings more buyers into the market. However, it remains a buyer’s market overall, offering more opportunities for those looking to purchase homes.
Chandler Leads as a Seller’s Market
Chandler continues to dominate as the top seller’s market in the region. On the other hand, areas on the outskirts, like Buckeye, with numerous new builds, remain strong buyer’s markets, providing competitive pricing for prospective homeowners.
Sales Appreciation Trends
You might be wondering, why is the average sales price per square foot showing a 6.7% appreciation if we’re in a buyer’s market?
If we exclude homes priced above $3 million, the appreciation rate drops to 3.7%. This highlights the importance of analyzing price ranges to get a clearer picture of market trends. Most price ranges are relatively flat in terms of appreciation.
Lowest Sales Since 2008
Sales activity has slowed significantly, with the current numbers being the lowest since 2008. This indicates a more cautious approach from both buyers and sellers.
Luxury Market Boom
The luxury market is thriving, fueled potentially by crypto wealth and a robust stock market. High-end properties are seeing increased demand, driving activity in this segment.
Supply Trends
Supply has risen by 36% since 2024, with condos under 1,500 sqft showing the largest gains. This surge in supply could be attributed to soaring insurance rates and HOA fees, making condo ownership increasingly expensive.
Hotspots to Watch
Old Town Scottsdale is experiencing high demand, making it a hot market for buyers and sellers alike.
Median Sale Price in Phoenix
The median sale price of a home in Phoenix now stands at approximately $450,000, reflecting a 2.3% increase from December 2023.

The Phoenix housing market is slightly favoring buyers due to slower price growth, less competition, seller concessions, and faster sales compared to the previous year.

The average sales price per square foot in Phoenix has been steadily increasing over time, with a slight dip in December 2023. This is more like 3.7% when you exclude $3 million or above
Phoenix Rental Market Overview
The Phoenix rental market has seen significant changes due to rising home prices, economic factors, and shifting demographics.
As homeownership becomes less accessible, the demand for rental properties has increased, creating a competitive market.
Average rent prices in Phoenix have slightly declined compared to the previous year, indicating a cooling trend.
– Average rent: $1,422 per month, a 1.4% decrease from the previous year.
– Studio apartments: $1,105 per month.
– One-bedroom apartments: $1,322 per month.
– Two-bedroom apartments: $1,565 per month.
Neighborhoods vary significantly in rental prices.
– Areas like Desert Ridge have higher average rents, around $1,825 per month for a studio apartment.
– Neighborhoods like Arcadia Lite offer more affordable options, with studio rents around $1,366 per month.
Rental prices vary based on neighborhood, property type, and amenities.
Downtown Phoenix: The average rent for a one-bedroom apartment is about $2,100/month, driven by high demand for urban living and proximity to employers, entertainment, and attractions.
Arcadia: The average rent for a two-bedroom apartment is around $2,500/month, due to upscale homes, local businesses, and downtown proximity.
Desert Ridge: Rent is slightly more affordable, between $2,000 and $2,200/month for a one-bedroom apartment. The neighborhood’s family-friendly environment and amenities make it popular.
Phoenix’s rental market has low vacancy rates, reflecting strong demand and limited supply. The current rate is about 4.5%, down from 4.7% last year.
Factors contributing to these low rates include:
– Limited new construction, especially in affordable and mid-range segments.
– Increased demand from homebuyers due to rising home prices and interest rates.
– Economic and demographic shifts, with Phoenix’s strong economy attracting new residents, many of whom choose to rent before buying.
This influx of residents has increased demand for rental housing, especially near employment centers and public transportation.
These factors indicate Phoenix’s rental market will remain competitive.
Landlords will likely keep experiencing high occupancy rates, and rental prices will rise, especially in areas with high demand.

The chart shows that the average rent for both 1-bedroom and 2-bedroom apartments in Phoenix, Arizona has remained relatively stable over the past year, with some minor fluctuations.

The majority of FY25 prospects are located in California, with significant presence also in Texas, New York, and Illinois, and 17% are international.

The chart shows that the majority of people relocating to Arizona are between the ages of 25 and 44, with the largest group being between 35 and 44.


The percentage of home closings where the seller contributed to the buyer's expenses (like closing costs) has gone up in Arizona. This suggests a shift in the market where sellers are offering more incentives to attract buyers.

Rent for apartments has skyrocketed in recent years, making it increasingly expensive to live in rental properties.

The cost of homeowners insurance has been steadily increasing over time.

There is a significant increase in the number of homes available for sale in the Arizona housing market, particularly for smaller properties and condos, between 2014 and 2023.

Sales per month in Greater Phoenix have been fluctuating, with a significant increase in closings over $3 million in 2024.

Monthly sales counts in Greater Phoenix, with December 2024 shows a 12.9% year-over-year increase.

The Cromford Market Index shows areas favoring sellers (e.g., Chandler, Gilbert), buyers (e.g., Sun City, Goodyear), and balanced markets (e.g., Mesa, Gold Canyon), reflecting varying demand and supply dynamics.

Real estate markets are categorized into "Seller's Markets," "Buyer's Markets," and "Balanced Markets" based on factors like supply and demand, providing valuable insights for both buyers and sellers.

A sharp dip in the index is visible around 2008, which likely corresponds to the global financial crisis. This period is often associated with a shift towards buyer's market conditions as demand for housing decreased.

The graph illustrates the fluctuations of the Cromford Demand Index and Cromford Supply Index from 2006 to 2024, revealing a long-term upward trend in both, with demand exhibiting greater volatility than supply.

The Cromford Market Index gauges supply, demand, and overall market conditions, with current readings indicating a balanced market leaning slightly towards a buyer's market.

A significant increase in the average monthly lease price per square foot for single-family homes in Buckeye, Arizona, from 2019 to 2024.

The chart shows the median agent days on market at contract for Greater Phoenix, AZ. It indicates that the median time for homes to go under contract has increased significantly from 2023 to 2024, with a particularly sharp rise in January 2024.

The data displays the number of price reductions and enhancements for residential properties in Greater Phoenix, Arizona, measured daily. It shows a significant increase in price reductions in 2024 compared to 2023.

The table shows the number of ARMLS sales by price range in 2023 and 2024. It reveals a significant decrease in sales for properties priced between $1M and $1.5M in 2024 compared to 2023.

The data shows that appreciation for homes priced over $3 million decreased from 2023 to 2024.
Please reach out!
Jason Bru
480-466-4917
jay@jaybrugroup.com