As of November 2025, Arizona’s housing market has shifted toward a buyer’s landscape, with the median days on market (DOM) reaching 70 statewide and 63 in the Phoenix metro—up from 60 and 53 a year ago, respectively. This marks the longest stretches since 2019 in many areas, driven by a post-pandemic correction in the Sun Belt. Sales are up modestly (4-5% YoY), but inventory has surged 20-22%, creating a 4.1-4.4 month supply (balanced is ~3-4 months). Prices are stabilizing or dipping slightly (median ~$475,000-$499,000, flat to -1.2% YoY), with nearly half of Phoenix listings seeing price cuts. Below, I outline the main factors, based on recent data from sources like Redfin, Zillow, NAR, and local reports.
1. Elevated Mortgage Rates and Affordability Squeeze Rates remain stubborn at 6.7-6.9% for 30-year fixed mortgages, up from sub-3% lows in 2021, adding $300-500/month to payments on a typical $450,000 home. This has cooled demand, especially among first-time buyers (who make up ~30% of AZ purchases), as combined costs (including insurance up 15-20% YoY to ~$2,110 annually) exceed budgets. The “lock-in effect” persists: 85% of AZ homeowners have rates below 5%, deterring relists and limiting supply turnover.
- Impact: Pending sales are up 24% but selectively; homes take 10-15 extra days as buyers wait for potential Fed cuts (forecast: stable at 6.4% through Q1 2026).
2. Inventory Overhang from Post-Pandemic Building Boom AZ saw a construction surge during low-rate years, adding thousands of units in Phoenix suburbs (e.g., Mesa, Chandler). Inventory hit 41,000+ listings by mid-year (up 22% YoY), with new builds comprising 25% of supply. While this eases shortages, it overwhelms demand in overbuilt areas like Phoenix (16,800 active listings) and Tucson, where supply now exceeds sales by 4+ months.
- Impact: Buyers browse more options, leading to pickier negotiations; East Valley DOM jumped 28% to 68 days in Mesa. New permits are down 15%, signaling a slowdown, but the glut keeps resale homes sidelined.
3. Seller Overpricing and Stubborn Expectations Many listings are priced 5-10% above comps, echoing 2022 peaks when Phoenix values soared 30% YoY. With growth now at 0-1.9%, unrealistic asks (e.g., anchored to outdated Zillow ZHVI) result in 49% of Phoenix homes cutting prices. Sellers resist concessions like rate buydowns or repairs, causing “stale” listings after 30-45 days.
- Impact: Only 12-14% sell above list (down from 25%+ in 2022); statewide, this adds 20+ days, with luxury ($1M+) in Tucson moving faster due to out-of-state appeal.
4. Rising Ancillary Costs and Economic Caution Homeowners insurance has spiked 18% due to wildfire/hail risks and reinsurance hikes, pushing totals to $176/month. Property taxes and HOA fees (common in 40% of AZ communities) add friction, while economic jitters—e.g., slower job growth in tech/manufacturing—make buyers hesitant. Multigenerational living is up, reducing turnover, and short-term rental investors (post-Airbnb regs) are exiting, flooding mid-tier inventory.
- Impact: Affordability index hit a 5-year low; buyers favor incentives (e.g., solar-equipped homes in green-conscious suburbs like Goodyear), extending DOM by 5-10 days for non-competitive listings.
5. Regional and Seasonal Variations Phoenix (63 DOM) outpaces the state but lags national slowdowns; rural north (e.g., Flagstaff) sees shorter times (40-50 days) from strong demand. Summer heat historically slows showings, but November’s uptick in contracts (up 27%) hints at a seasonal rebound. Broader trends like return-to-office mandates could add urban inventory if relocators list.
| Factor | Statewide Avg. DOM Impact | Key AZ Markets Affected |
|---|---|---|
| High Rates/Affordability | +10-15 days | Phoenix (63 days), Tucson (75+ days) |
| Inventory Surge | +15-20 days | Mesa (68 days), Chandler (105 avg.) |
| Overpricing | +20 days | Statewide; 49% price cuts in Phoenix |
| Ancillary Costs | +5-10 days | Suburban areas with high HOAs/insurance |
| Economic/Regional | +5-10 days | Rural north faster; Sun Belt glut |
In essence, Arizona’s market is “normalizing” without crashing—prices may dip 1-2% more by year-end before 3% growth in 2026. Sellers: Price realistically, stage aggressively, and offer buydowns. Buyers: Leverage concessions amid 20% more choices. For hyper-local insights (e.g., Scottsdale vs. Surprise), check ARMLS data or a local agent, as variations are stark. Let’s connect!!
