Everywhere you look, there is news about the Phoenix market crashing. So, what’s really going on? Is there truth to the click bait headlines? Let’s jump into our Phoenix metro real estate update for May 2025 to find out. As always, the big numbers we are watching are available inventory, home loan rates and the contract ratio–that is the new listing to pending sale ratio. Our inventory was climbing month-over-month but it has been pretty steady for the past 30-45 days. Currently there are approximately 25,591 active listings across the Phoenix metro area(this does not include homes that are under contract with contingencies). This level is a slight decrease from our last report.
We did see a slight increase in the number of pending sales over the past month:
Mortgage rates remain high at around 7% for our area–keep in mind that the rate you qualify for is dependent upon many factors. Most of the Phoenix area has moved into a market where buyers have a slight advantage, though there are a few cities/towns that are fairing better than others. Job growth is in the positive so far this year and there is positive net migration into Phoenix and the surrounding cities. Indeed, our county is poised for more growth this year and coming years due to an influx of new tech companies and the expansion of existing companies.
The contract ratio currently sits at around 31%–not terrible, but we’re not breaking any records either. Summer months are typically more slow anyway so sales will likely plateau for the next few months–this means sellers must take great care in prepping and pricing their homes to stand out among the competition. Buyers can be more patient, but some homes, if priced right and nicely presented, are stilling selling quickly. Case in point, we have two listings under contract that both sold in two weeks or less. Fear not, there is still hope if you are thinking of listing your home for sale!
Here are some MLS stats for the recently closed sales for April and May:
- Average days on market: 76
- Average sold price per square foot: $336
- Average list to sale price ratio: .96
Market Summary
The overall outlook for the Phoenix metro area still looks pretty good. Prices, in some areas, are declining, but right now it’s a gentle glide. Sellers need to be realistic when pricing their homes and buyers need to know when to act fast and when to be patient–there are still areas around the county where homes are selling in less than 30 days on the market. As a side note, the National Association of Realtors came out with a list of “hot spots to watch in 2025” and Phoenix, Chandler and Mesa made the list.
We may see less homes hit the market during June and July and if demand stays steady, this will lead to a slight decrease in available inventory. Thanks for reviewing our Phoenix metro real estate update.
