Phoenix is the state capital of Arizona- one of the most populated state capitals in the country. It is located in Maricopa County and is the fifth-largest city in the area.

Between the booming student scenes in North-West and Downtown Phoenix, the opportunities for property investors looking to buy to rent are excellent- with large single-family homes to be used as student housing making up a fair portion of the most attractive listings.

The area covered by the Phoenix housing market is incredibly vast- with a wide range of neighborhoods, home values, and communities. Growth in job opportunities has left the city in a position where its population has overtaken the increase in housing supply- leaving a strong seller's market with stiff competition between buyers.

Phoenix has long since been a hot market for investors, and until the crash in 2008, it was one of the most prominent and appealing in the country. More than a decade later, it seems to have made a significant recovery- and is once again drawing the attention of buyers.

Current trends show that demand is high in Phoenix- despite rising home prices. More people want to buy than sell, and for those who succeed, there is an excellent market for renting to tenants and selling on in the future.

That said, some experts predict changes on the horizon, so it is important to follow trends closely. Here is an overview of everything you need to know about the real estate market in Phoenix.

Key Statistics for Recent Months

  • The average sale price of homes in Phoenix climbed from $402,000 to $425,000 in the first five months of 2023.
  • Total home sales have reduced by almost a third year-over-year so far.
  • Homes are currently selling for 98.1% of the median listing home price.
  • 19.1% of Phoenix properties sold for above asking price in April 2023.
  • Properties are taking more than twice as long to sell as they did last year, but the speed is increasing gradually.

What Are the Phoenix Housing Market Trends for 2023?

Overall, the Phoenix housing market is trending towards a seriously seller-biased market. Prices are climbing, demand is as high as ever, and sales are quicker and quicker each month. Home sales may not be on par with the dizzy heights of the previous year, but values are creeping toward the recent peak of mid-2022.

Here is more information and further detail regarding key housing trends in the 2023 Phoenix market.

Decreased Sale Volume

There has been a significant year-over-year drop in the total number of homes sold in Phoenix so far in 2023. The year opened with a 43% YOY drop and a total January sale volume of 1047. Numbers improved slightly over the following months- 1377 in February (a 32.7% drop year-over-year) and 1721 in March (a 28.6% decline compared to the same period from last year).

The trend seemed to be on the up, but took a downward turn in April- heading back to a 32.5% YOY decrease in sales.

Lower sale numbers could suggest a cooling demand- but steadily high sale prices suggest otherwise. It is more likely connected to the lack of available housing units- there are simply not enough properties on the market. Combined with higher mortgage interest rates, people are not buying as often in Phoenix, AZ.

Predictions favor the belief that this trend will continue as prices rise.

Increased Median Sales Price

The median sale price for properties in Phoenix has increased consecutively month to month in 2023, and experts expect the same trend to continue. It also comes down to the imbalance of supply and demand in the city- putting sellers in a position where they can set higher asking prices- and buyers in a position where they need to be competitive with their offers.

Currently, the median sale price for homes in Phoenix is $425,000- a 7.6% decrease year-over-year- but an improvement from the previous months. At the beginning of 2023, the median sale price was $400,000, but it has climbed each month- a trend that is expected to stay on the same trajectory for the time being.

Most homes are selling very close to their list price because of multiple buyers bidding on the same properties. The sale-to-list price ratio is currently 98.1%. Again, this makes it unlikely that average prices will drop any time soon.

One thing that is promising from the buyer's perspective is the significant decrease in the number of homes sold for over the list price. In April 2022, more than 60% of properties sold for more than the seller was asking, but in April 2023, the figure had plummeted to just 19.1%.

Also, 28.5% of homes sold in that period dropped the price before securing a sale- an increase of 9.6% year-over-year. That said, the previous month had a much higher YOY increase of 17.6%- with two-thirds of properties reducing the asking price. This shows a trend of fewer sellers reducing their ask- probably because as competition increases, they have multiple bidders who drive the price up.

Lack of Housing Supply

As we have already mentioned, the current supply of houses in the Phoenix, Arizona real estate market is well below where it needs to be for a balanced market. There are very few new construction projects underway, and thanks to inflation and interest rates of mortgages, people are not selling because they can't afford the new monthly payments.

These factors combined have left inventory seriously lacking, and it doesn't look like it will change in the coming months.

Sale Speeds Increasing

One of the most significant trends in the Phoenix real estate market in 2023 is the reduced median days on the market. Homes are selling much faster- and the year-over-year differences have reduced each month.

In the most recent reports, the average length of time taken for a home to sell was 46 days- 26 days longer than the same period in the previous year- but six days less than the previous month. Earlier in the year, it was taking an average of 72 days for homes to sell- which was 44 days longer than the previous year.

The faster sales reflect the competition and demand, with potential buyers needing to move quickly- if they want to secure their new home.

Factors Impacting the Phoenix, Arizona Real Estate Market

Market trends in Phoenix are influenced by several factors. Here are some of the main things having an impact on the city and its real estate market right now and in the coming months.

Lack of New Listings

One of the major issues in the Phoenix housing market is the lack of available homes for sale. Without a sufficient inventory, buyers are limited in their options- meaning more people competing for the same properties. This drives prices up- regardless of economic difficulties, and can price out a large portion of interested buyers.

Boomers Selling

The boomer population in Phoenix accounts for a significant portion of homeowners in the city, and when they decide to sell and downsize or move elsewhere for retirement, they contribute new listings to the market.

Since these are the people more likely to have a mortgage-free or low-mortgage property, they have the power to relieve the pressure on the market and create an influx of new listings.

Mortgage Rates

Rising interest rates on mortgages have had an impact on housing markets throughout the US- Phoenix included. People are finding it harder to afford properties- which has a knock-on effect on the housing supply.

If people can't find an affordable mortgage for a new property, they are unlikely to sell their existing home. This combined with fewer new builds in the Phoenix area has left the inventory short- creating a more competitive buyer situation and the opportunity for prices to rise.

Phoenix Housing Market Forecast

Here is an overview of the forecasts for the Phoenix housing market moving forward.

Short-Term Increase in the Median Home Sold Price

Home prices in Phoenix took a tumble in the latter half of 2022- but have begun showing recovery since the beginning of the year. Although costs are lower year-over-year, the difference is minimal.

Forecasts are for this to continue, and we could see prices climb closer to the previous year's figures. That said, not everyone believes it will last too much longer. The climbing prices hinge on buyers being able to bid competitively and keep up with higher asking prices despite the climbing mortgage rates. If they can't, sellers may be left with no choice other than to start reducing costs.

A Strong Seller's Market

If things remain as they are now- a.k.a limited inventory and high demand- the seller's market in Phoenix will strengthen. Sellers are already in a great position, with prices continuing to rise month on month in 2023.

Most properties are currently selling for close to the asking price- within 2% on average. This is a clear sign that demand is high and the sellers have the power- meaning buyers must be competitive and prices can remain high.

Potential for Significant Market Cooling

Housing demand in Phoenix is high- which is causing property prices to rise again after a six-month decline in the second half of 2022. However, if they rise too high, people could begin looking elsewhere. If that happens, the market will cool drastically.

Some experts predict that housing costs could fall as much as 25% if the demand dwindles. Market stays would increase, and sellers could find themselves stuck- or selling their property for less than it is worth.

Hopefully, the draw of Phoenix will keep buyer activity pumping- which is the opinion many market analysts hold at the moment.

Housing Market Forecast for the US in General

Across the US, housing market trends show low supply, high demand, longer market stays, and reduced house prices. Inflation and higher mortgage rates have had a nationwide impact on affordability- making it harder, on one hand, to sell a property because of the limited buyers.

However, because the national supply of housing is so low right now, there is a lot of competition between buyers that has stopped prices from falling. Since there are fewer options out there, sellers can afford to price higher without pushing buyers away.

It is a delicate balance, but that- for now at least- seems reasonably stable.

Is the Phoenix Real Estate Market At Risk of Crashing?

An imminent housing crisis is not something the experts seem overly concerned about in Phoenix- but there are some who believe a significant drop at a level close to what happened before the last crash could be on the horizon.

As long as buyer demand stays as high as it is, prices could continue to climb- but if they go too high, the city could become unaffordable to most- creating a difficult situation for sellers who could be forced to slash their asking prices to get their homes sold. If that were to happen, it could create a bubble if the supply does not increase.


As it stands, the Phoenix housing market looks strong- especially for sellers. It is an appealing place for buyers and property investors because of the large population are several popular neighborhoods for renting, so buyer competition is fierce.

Some experts predict a possible drop in the market if prices rise too high, but for now, things are in good shape, and price increases are not out of control.

Although median days spent on the market are still up significantly year-over-year, the increase is reducing gradually as buyer activity heats up. Hopefully, the inventory gets a boost when the boomer population starts to sell and downsize.

Frequently Asked Questions

Does the Phoenix market offer affordable housing?

The median sale price of homes in Phoenix is above the national average- currently at $425,000 compared to $400,700. It is still considered one of the more affordable state capitals, and has several areas where the housing market average prices are much lower.

Central City South, for example, has a median sales price of just $294,000 according to the most recent report. At the other end of the scale, you have Desert View, which has a median price of $638,000 right now, and Arcadia- the most expensive neighborhood- with average prices exceeding $1.5 million.

In short, Phoenix's affordability rating depends on the neighborhoods you are interested in.

Is it a good idea to invest in property in Phoenix, Arizona?

Phoenix home prices have been on the rise for consecutive months- and have only ever dipped slightly below the previous year's figures. In that respect, it is a tricky time to be a buyer in the city- since the market is quite competitive, and sellers have most of the power.

That said, the economy in Phoenix is reasonably stable, and an influx of new interest keeps the population growing. If you are buying to rent, it could be a worthwhile investment for the returns through tenants- as long as you have the budget to pay close to the asking prices.

Does the Phoenix area have a balanced market for real estate?

Currently, Phoenix is a seller's market- because the demand outweighs the supply, so buyers need to put in competitive offers to win the house they want. There have been issues with inventory for some time in Phoenix, which has contributed to keeping prices up despite the higher mortgage rates.

Some predictions expect things to take a turn downwards for seller power if people can simply no longer afford what people are asking. Right now, most homes in Phoenix sell for within one percent of the asking price, which is a strong position to be in as a seller. Buyer competition maintains this trend, but if mortgage interest continues rising, it could price people out completely and leave sellers unable to close on their property.

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!