By Mike Bodeen · 15 September 2025
The Phoenix Metro residential real estate market is holding. Quiet. Calm. Sort of in a big yawn mode. But there’s an underlying tension and uneasiness that real estate professionals are feeling at this point, at least I am.
The number of real estate listings have risen sharply since the market low of 4600 in 2021, to the historic norm of around 25,000 units (see chart). We’re currently at about 24,000 homes for sale. Normal. A good number.
The Cromford Market Index which has tracked our current buyer’s market since February, has bottomed out and is heading towards balance territory which may yet be a few months away. It’s a slow climb out of the trench, but it’s an upward climb nonetheless.
“What buyers may gain from a lower mortgage rate, they could lose in ever increasing prices. THIS is my uneasiness – the buyer opportunity window closing.”
Prices, one half of the major problem of affordability, are slowly dropping. The median monthly sales price of our homes was $450,000 last month and is now at $440,000. Average listing prices have dropped from $360 per square foot (PSF) last quarter to $333 currently. Average prices of homes under contract have dropped from $322 last quarter to 313 today.
These listing numbers foreshadow further price drops. This is the window of opportunity – prices and mortgage rates dropping together. But this can turn – on a dime – remember the Covid market.
Mortgage rates, as we.ve been reporting, continue lower. Last Friday the 30-year conventional fixed rate had dropped to 6.29%. FHA (3.5% cash down payment) and VA (Zero down payment) are at 6%.
These are all trending well for buyers. So why the uneasiness?
Something’s gonna give – a subjective observation
For one, recession predictions are as high as 93%. A recession will (should) see a continued drop in mortgage rates. That’s good news for buyers and sellers. The bad news is that people lose jobs which is often followed by people losing homes in foreclosure. This creates uncertainty. If you’re concerned about the future of your employment, you will think long and hard about a lot of things, especially buying a home that’s more costly than your current living situation. This could have the effect buyers continuing to hold back their purchase.
If low rates unleash buyers in large numbers, we could see the market pendulum swing towards a dominant seller’s market (supply and demand), increasing prices even further. What buyers may gain from a lower mortgage rate, they could lose in ever increasing prices. THIS is my uneasiness – the buyer opportunity window closing.
On a positive note, it’s possible, that depending on how low rates go, that this could release the shackles of sellers to sell and move on to where they want to go. That could benefit the overall market by blending more buyers with more listings to perhaps continue a balanced trend of stabilization.
May it be so.
Mike Bodeen
Market data referenced in this article comes from The Cromford Report.