Phoenix Metro Real Estate Market Update – August 2025

The housing market across Greater Phoenix continues to adjust. While the number of homes for sale is still higher than this time last year, inventory has started to decline month over month. Demand remains muted, and home prices are showing signs of softening. Here’s what buyers and sellers should know right now.

Inventory Trends

The number of active listings across the Valley is up 38% compared to August 2024, giving buyers significantly more choice than they had a year ago. However, inventory has dropped about 6% since July, mostly due to a rise in canceled and expired listings. Some sellers are choosing to sit out for now, giving those who remain on the market a slight competitive edge.

Buyer Demand

Unfortunately for sellers, demand is still weak:

  • The number of homes going under contract is slightly higher than this time last year but down more than 4% from last month.
  • Closed sales are down slightly year-over-year and fell over 7% from June to July.

This indicates that many buyers are either holding off or being more selective — a far cry from the bidding wars of 2021 and 2022.

Home Prices

Prices are under gentle pressure:

  • The average price per square foot dropped nearly 3% from the previous month.
  • The median sales price dipped about 1.8% from June but still sits just slightly above where it was last August.

This reflects a typical seasonal slowdown, especially in the higher-end segments of the market, which tend to quiet down in the summer.

Looking Ahead

August is likely to bring more of the same — limited buyer activity and gradually falling supply. However, we often see a second wave of listings in September as sellers return to the market for the fall season. This is particularly common in the luxury and 55+ communities.

Although the pace of the market is slow, buyers who are active now are being treated with care and consideration, a sharp contrast to the competitive climate of recent years. And with pricing now close to 2022 levels — but inflation reducing the real cost of housing — homes are becoming more affordable in practical terms.

Bottom Line

The Phoenix housing market is in a slower, more balanced phase. Sellers who stay in the market benefit from reduced competition, while buyers have more negotiating power and time to make decisions. Conditions may shift again as we head into fall, but for now, it’s a market that rewards patience, preparation, and realistic expectations.