Arizona Real Estate Market Update 2025: Are Prices Rising, Falling, or Holding Steady?
If you’ve been keeping an eye on the Arizona housing market this year, you’ve probably noticed the conversation shifting. After years of rapid growth and record breaking prices, the market is starting to show signs of cooling. But what does that really mean for buyers and sellers in 2025? Are home prices rising, falling, or holding steady? Let’s break it down.Current State of the Arizona Housing Market
The short answer: Arizona home prices are holding mostly steady with slight declines in some areas.
According to Zillow, the average Arizona home value is around $422,446, which is down about 3.2% year over year.
Redfin reports that in August 2025, the median home price was roughly $441,200, essentially flat compared to last year.
In Phoenix, the largest metro in the state, median sale prices hover around $445,000, which is about 1.1% lower than 2024.
This suggests the days of double digit price growth are behind us, at least for now.
Inventory and Buyer Demand One of the biggest changes this year is the rise in inventory:
Arizona had about 45,000+ homes for sale in August 2025, up more than 16% compared to last year.
In June, total active listings were nearly 25% higher than in 2024, according to Norada Real Estate.
Homes are also spending more days on market, signaling a slower pace and less urgency among buyers.
While inventory is rising, demand hasn’t disappeared. Phoenix home sales in August were actually up 7% year over year, showing that buyers are still active — they’re just being more selective and taking their time.Why the Market Is Cooling
Several factors are driving this shift:
Higher mortgage rates – While rates have recently eased a bit, they’re still higher than what many buyers were used to, stretching affordability.
Increased cost of ownership – From property insurance to utilities, the true cost of owning a home is rising.
More options for buyers – With more homes on the market, buyers have leverage to negotiate and avoid bidding wars.
Economic adjustment – Arizona is coming off of record highs from 2020–2022, so today’s numbers look more like a correction than a crash.
What This Means for Buyers
If you’re planning to buy in 2025, this is good news:
You’ll find more homes to choose from.
Bidding wars are less common, giving you more room to negotiate.
Sellers are often willing to offer closing cost credits or rate buy downs to attract buyers.
Pro Tip: Make sure you’re preapproved for financing. Even a small rate shift can make a big difference in your monthly payment.What This Means for Sellers
If you’re selling this year, strategy matters more than ever:
Pricing competitively is critical. Buyers are quick to overlook overpriced homes.
Staging and presentation will help your property stand out in a larger pool of listings.
Be ready to offer concessions, such as repair credits or help with closing costs.
Homes that are move-in ready and well-priced are still selling quickly, especially in desirable neighborhoods.Regional Differences Across Arizona
Not every part of Arizona is behaving the same way:
Phoenix metro: Slight price declines and longer days on market.
Smaller or rural cities: Some areas like Flagstaff and Kingman are still seeing price growth.
Luxury neighborhoods: Higher-end homes in Scottsdale, Paradise Valley, and Arcadia are generally more insulated and may continue to hold value better than entry-level markets.
The Bottom Line: 2025 Arizona Housing Market Outlook
The Arizona real estate market is shifting toward balance. Prices aren’t skyrocketing like they did a few years ago, but we’re also not seeing a crash. Instead, buyers are gaining more leverage while sellers need to be strategic.
Looking ahead into 2025 and early 2026:
Prices are likely to remain flat to slightly down, with pockets of growth depending on location.
Inventory will probably stay elevated, giving buyers more options.
The market will depend heavily on mortgage rate trends, migration patterns, and Arizona’s job growth.
Stay Informed with a Trusted Arizona Realtor®
The real estate market is constantly evolving, and having a local expert by your side can make all the difference. Whether you’re thinking of buying, selling, or investing, I can provide the insights, strategies, and guidance you need to make the best decision in today’s market. Contact me today for more information or to schedule a personalized consultation:
Alejandra Paladino
Top Producing REALTOR® | eXp Realty
Arizona Relocation & New Construction Specialist
Call/Text: 480.382.0519
Email: Alejandra@azalejandra.com
Search Homes: azalejandra.com