By Mike Bodeen · 10 March 2025
Builders and Renters Facing Challenges
The Phoenix Metro buyer’s market trend continues dropping deeper. Active (Unsold) listings have increased from last month (6.7%) and from last year (44%). Under Contract listings are basically unchanged from one year ago, but are up 14% from last month. Historically sales increase until about May 1st, before they begin to drop down.
One surprising trend (to me anyway) is the median sales price bump from one year ago (6.7% increase).
Now remember, it’s easy to paint a large swath of stats to make them appear how we’d like them to appear. As an example, a headline from the National Association of Realtors will indicate sales higher or lower, and our tendency is to attribute those numbers to us locally. Another example is the Case-Shiller sales report. It always seems to garner big headlines no matter the reporting. The problem there is that their sales numbers are 3 months behind reality – which they admit.
Here locally last week we showed you average sales price numbers PSF in Paradise Valley that were twice what the next city’s (Scottsdale) were. The Northeast Valley’s higher sales numbers greatly affect the overall sales numbers. As professionals, when we are determining the value of a property, we’re looking more closely to the micro location rather than the macro of Phoenix Metro, or Arizona.
Having said all that, below are the macro numbers for Phoenix Metro for March 1, 2025 vs. March 1, 2024.
Here are the most recent numbers from ARMLS (Arizona Regional Multiple Listing Service) for March 1, 2025 vs March 1, 2024 for all areas & types plus Maricopa County New Home Sales:
Active Listings: 23,934 vs 16,568 last year – up 44% – and up 6.7% from 22,432 last month
Under Contract Listings: 8,471 vs 8,693 last year – down 2.6% – but up 14% from 7,403 last month
Monthly Sales: 5,745 vs 5,757 last year – down 0.2% – but up 21% from 4,733 last month
Monthly Average Sales Price per SqFt: $313 vs $293 last year – up 6.8% – but down 0.3% from $313.55 last month
Monthly Median Sales Price: $459,000 vs $430,000 last year – up 6.7% – and up 1.28% from $453,500 last month
There were 1,283 closed new homes, down 4.6% from 1,345 in February 2024 but up 13% from January. The new home median sales price was $530,000, up 2.7% from February 2024 but down 2.7% from January.
Monthly Avg Lease Price PSF $1.38, up from $1.33 February (See story below)
Cromford Market Index: 84.5. Down from 85 last week. Down from 117 one year ago. (90-110) is a balanced market. Above 110 is a seller’s Market. Below 90 is a buyer’s market.
New Home Sales Update
New home sales which had been a bright sales spot last year dropped 4.6% from one year ago. Builders had been keeping sales upbeat as they were able to provide buyer incentives including mortgage buy-down rates. Builders are now looking at possible higher building costs (tariff’s and higher material demands). Higher labor costs (fewer laborers via deportation along with a greater labor demand for huge catastrophe related re-build projects in Florida and California), will be a huge challenge for builders especially if mortgage rates remain elevated.
Remembering Rising Rents
On the rental side of things, it’s looking like renters may no longer be catching a price break. Or, perhaps the better title might be, “the party’s over!” Rents per square foot are now up to $1.38 PSF. This is up from $1.33 one year ago. Rental prices had remained subdued the past three years averaging $1.33 PSF. Prior to that, rents had dramatically increased from .73 PSF in 2015, to $1.01 in 2020, to $1.33 in 2022 when rental prices leveled off. But that was an 82% rise in rental rates in just 7 years – over 11% per year.
Market data referenced in this article comes from The Cromford Report.