The Phoenix housing market is under the spotlight as reports highlight a significant rise in available homes. While some fear this could signal an impending downturn, experts suggest a more complex scenario is at play. With the real estate inventory reaching levels not seen since 2016, what does this mean for buyers and sellers alike?
Tina Tamboer, a senior housing analyst at the Cromford Report, offers her insights into the current market dynamics.
Analyzing Inventory Levels
According to Tina Tamboer, the increase in housing inventory doesn’t automatically predict a market crash. Reflecting on 2016, when the inventory was similarly high, Tamboer notes, “we were not crashing in 2016, so that doesn’t necessarily mean that our values are going to crash.” She points out that the housing market then was thriving, with values on the rise.
Currently, the Phoenix market is experiencing a stable demand, as potential buyers await changes in mortgage rates. The luxury segment has been particularly vibrant between 2024 and 2025, maintaining high property prices. However, recent fluctuations in the stock market have caused some luxury buyers to pause their investments.
Market Dynamics and Economic Concerns
Despite concerns about a potential sell-off due to economic anxiety, Tamboer does not see significant evidence to support this. Instead, she highlights that a considerable portion of the market comprises second homes or rental properties. The recent challenges in the short-term rental market, exacerbated by a strong U.S. dollar, have led to more properties being listed. This scenario benefits buyers, as these homes are often well-maintained and come furnished.
Additionally, favorable exchange rates have encouraged Canadian sellers to list their properties, contributing to the increased inventory.
Price Trends and Market Adjustments
Nick Gurley, CEO of Reventure app, has suggested that the market is “trending down fast,” highlighting a 7% drop in home prices since June 2022. However, Tamboer attributes the peak prices during the pandemic to extensive flip investing by major corporations. As mortgage rates rose, these investors found it challenging to offload properties, leading to a 13% price decrease from June to December 2022.
Since then, the market has stabilized, and prices have remained relatively flat. Tamboer explains that, “when we look at the price points by price range, year-over-year changes are under 2%,” indicating minimal fluctuations.
The shift in market share from luxury to more affordable homes has skewed the average price data, creating an illusion of a dramatic price drop. However, Tamboer reassures that the market is simply adjusting to the ongoing buyer’s market, where sellers are more willing to negotiate on price and terms.
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