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Is Phoenix a Buyer or Seller Market? Understanding the Phoenix Housing Market
Is Phoenix a buyer’s market or a seller’s market? The answer isn’t as simple as one label.
Trevor Halpern, founder of Halpern Residential, recently discussed the Phoenix housing market on the AZ Big Podcast, explaining why Metro Phoenix is relatively balanced overall while individual cities and neighborhoods can experience very different market conditions.
At the time of the interview, nine of Metro Phoenix’s 18 major cities were in seller-market territory, three were balanced, and six were buyer markets.
For buyers and sellers, that means understanding the local market is more important than relying on broad headlines.
Is Phoenix Currently a Buyer or Seller Market?
Trevor described the overall Metro Phoenix housing market as “quite balanced.”
However, the picture changes when individual cities are examined using the Cromford Market Index.
The index provides a way to measure the balance between buyers and sellers:
- 100: Balanced market
- Below 100: Buyer’s market
- Above 100: Seller’s market
At the time of the podcast recording, Phoenix had a Cromford Market Index of 128, placing it in seller-market territory. Fountain Hills was at 164 and Chandler was at 155, while Buckeye was at 52, making it a heavily buyer-oriented market.
This demonstrates why the Phoenix real estate market needs to be evaluated city by city and, in many cases, neighborhood by neighborhood.
Why Buyers Are Moving Toward Central Phoenix
Trevor also explained how changing market conditions can influence where buyers choose to live.
During a strong seller’s market, competition can push home prices higher. Buyers may then move toward the outskirts of Metro Phoenix in search of more affordable options.
As the market becomes more balanced, that trend can reverse.
Buyers may begin moving back toward central areas, including Phoenix, Scottsdale, Tempe, Chandler, Glendale, and Gilbert.
Established central neighborhoods can become particularly attractive because buyers are weighing more than just the price of a home. Access to schools, employment centers, the airport, amenities, and other conveniences can all contribute to long-term demand.
Are Phoenix Home Prices Too High?
Affordability is one of the biggest concerns facing Phoenix home buyers.
However, Trevor recommends focusing on the median home price rather than the average.
Why?
Ultra-luxury sales can dramatically increase the average. A small number of multimillion-dollar transactions can make the overall market appear more expensive than it is for the typical buyer.
At the time of the interview, Trevor cited a Metro Phoenix median price of approximately $450,000, compared with about $445,000 the previous year. He characterized that change as a reasonable incremental increase rather than a boom or bust.
The larger affordability problem, according to Trevor, is the overall increase in the cost of goods and everyday expenses.
For first-time buyers, saving for a down payment while dealing with higher living costs can make entering the housing market more difficult.
How Mortgage Rates Affect the Phoenix Housing Market
Mortgage rates remain a major factor in buyer behavior.
Trevor discussed 30-year fixed mortgage rates around 6.25% at the time of the interview.
At rates in the six-percent range, buyers are still active, but they tend to be more selective.
Trevor explained that buyers become increasingly picky when rates are in the sixes. When rates move into the sevens, many buyers decide to wait.
But when rates consistently reach the five-percent range, buyer psychology can change.
More people who have been waiting on the sidelines may decide that the monthly payment fits their budget and enter the market.
What Happens When Mortgage Rates Fall?
Trevor referenced a mortgage-industry rule of thumb that for every one-percentage-point decrease in mortgage rates, approximately one million people nationally could enter the housing market.
The reason is simple: buyers have different affordability thresholds.
Someone may be waiting for rates to fall below 6%. Another buyer may be waiting for 5.5% or another specific level.
When rates reach those thresholds, demand can increase.
For Phoenix home sellers, increased demand could create more competition for desirable properties. For buyers, lower rates may improve affordability but could also mean more competition.
How Luxury Sales Affect Phoenix Housing Statistics
Phoenix has also become a significant ultra-luxury real estate market.
Trevor identified the COVID period as a major turning point, when people and wealth moved into Arizona.
Some buyers came for the weather, lifestyle, and ability to work remotely. Others purchased investment properties or eventually decided to remain in Arizona.
The influx of wealth helped push property values higher and contributed to the growth of the luxury market.
Trevor also discussed a group he calls “home collectors.”
These buyers may own five, six, or seven homes around the world and purchase an Arizona property because they want a particular home or lifestyle.
Why Median Price Is Better Than Average Price
Those luxury sales can create a problem when analyzing housing statistics.
A handful of $15 million-plus home sales can dramatically increase the average price and average price per square foot.
But those transactions do not necessarily reflect what the typical Phoenix home buyer is experiencing.
That’s why Trevor prefers median pricing.
The median is less affected by extreme sales and can provide a more representative picture of the middle of the market.
For anyone researching Phoenix home prices, this distinction is important.
Which Phoenix Neighborhoods Offer Stability?
When asked which areas buyers should consider if they want a property that remains desirable over time, Trevor highlighted central and established areas.
He specifically mentioned:
- North Central Phoenix
- Historic neighborhoods
- Arcadia
- Paradise Valley
- Core Scottsdale neighborhoods
- ZIP code 85254
These locations benefit from factors such as access to schools, employment, the airport, amenities, and other desirable destinations.
Trevor described these factors as neighborhood “multipliers” that can contribute to stability and long-term desirability.
Trevor Halpern’s Approach to Real Estate Risk
Trevor’s legal education also influences how he approaches real estate transactions.
He clarified during the podcast that he is not a licensed attorney, but he holds a law degree.
That background helps him approach transactions with a focus on anticipating potential problems and mitigating risk.
He described his approach as “play chess, not checkers.”
That means thinking several steps ahead, identifying potential risks, reviewing contract language carefully, and negotiating strategically on behalf of his clients.
The Biggest Mistake Phoenix Home Sellers Are Making
According to Trevor, the biggest mistake sellers are making is overpricing their homes.
Some sellers are still thinking about the COVID-era market, when homes could attract multiple offers and prices could rise rapidly.
Today’s buyers are more cautious.
If a property is overpriced, buyers may simply move on to another home rather than make an offer.
For Phoenix home sellers, accurate pricing based on current market conditions is therefore critical.
The Biggest Mistake Phoenix Home Buyers Are Making
For buyers, Trevor believes the biggest mistake is not being strategic.
He recommends working with experienced real estate and lending professionals rather than attempting to navigate the entire transaction alone.
Trevor specifically emphasized the value of having a strong relationship between the buyer’s agent and lender.
He also recommends interviewing lenders and making them compete for the buyer’s business.
When a buyer is preparing an offer, the agent and lender can work together to develop a strategy based on the specific circumstances of that transaction.
How to Choose a Phoenix Real Estate Agent
Trevor also addressed the importance of choosing an experienced real estate agent.
He noted that Arizona has roughly 40,000 real estate licenses, but not every license holder completes transactions frequently.
Because the Phoenix real estate market can change quickly, experience and market knowledge matter.
For sellers, Trevor recommends asking two important questions:
“What is your marketing plan?”
and
“How are you going to report that to me?”
A listing agent should be able to explain exactly how the property will be marketed and how the seller will receive information about the marketing activity.
For buyers, questions should focus on how the agent finds properties, manages showings, evaluates opportunities, and develops a purchasing strategy.
Phoenix Real Estate Market Forecast: 1 to 5 Years
Looking ahead, Trevor expects the next year of Phoenix real estate to be strongly influenced by mortgage rates.
He does not anticipate a dramatic decline in rates and expects the market to remain relatively steady.
Over the next five years, however, Trevor sees a more robust Phoenix real estate market.
As long as Arizona remains business-friendly and continues attracting population growth, he expects the state to remain a stable place for real estate investment.
Rather than predicting another dramatic boom, Trevor described the longer-term outlook as a steady and stable market.
What This Means for Phoenix Buyers and Sellers
The biggest takeaway from Trevor Halpern’s discussion is that there is no single answer to whether Phoenix is a buyer’s or seller’s market.
Metro Phoenix contains multiple submarkets, and conditions can vary considerably by city, neighborhood, property type, and price range.
For sellers, the message is clear: price strategically and have a specific marketing plan.
For buyers, being strategic with financing, choosing experienced professionals, and understanding the specific neighborhood can make a meaningful difference.
And for anyone trying to understand the Phoenix housing market, looking beyond broad headlines can provide a much clearer picture of what’s actually happening.
The Phoenix market isn’t simply a buyer’s market or a seller’s market. The right answer depends on where you are, what you’re buying or selling, and how strategically you approach the transaction.