There are currently 4.1 times more Sellers than Buyers. The facts: 23,672 listings to start March divided by 5,797 sales in February.
This report is compiled monthly with data taken from the Arizona Regional MLS and is intended to give our readers an understanding of the Phoenix Area Housing Market. We also have a 10-City Report each month. It's a factual report, and any opinions stated are only our opinions.
We believe we're still in a buyer's market based on higher inventory, lower home sales, and a -$14,821 gap between listing and sales prices. Details follow below.
Home Sales
There were 5,797 home sales in February, up +22.5% from the 4,734 sales in January (which is historically the lowest sales month of the year). They were:
+ 1,063 more than January's
+ 35 more than February 2024
91% of the 3 year average of 6,384 sales
To see longer term detail, click on our Monthly Sales Chart.
As a point of reference, monthly home sales averaged 9,165 in the 12-months before interest rates started increasing in March of 2022.
Interest rate hikes began in March '22 and started affecting home sales by April '22
Time Period | AVG Monthly Sales |
|---|---|
Apr '21 - Mar '22 (prior to rate hikes) | 9,165 |
Apr '22 - Mar '23 (12-months after hikes) | 6,511 |
Apr '23 - Mar '24 (months 13-24 after hikes) | 5,956 |
Apr '24 - Present (months 25-35 after hikes) | 5,953 |
Inventory
Inventory to begin March 2025 increased by 1,240 homes from February. That brought the total number of homes for sale to 23,672. There are currently 4.1 times more Sellers than Buyers. Additionally, inventory has risen 7,238 homes over the last 12-months since March 1st, 2024.
As a point of reference, monthly inventory averaged 5,832 homes in the 12-months before interest rates started increasing in March of 2022. Rising rates significantly slowed home sales and caused inventory to rise.
A greater number of listings provides buyers more choices and generally keeps prices from rising too fast. A lower number of listings leaves buyer's with less choices and greater competition for homes. This leads to faster rises in home prices. View our longer-term chart for Housing Inventory.
Interest rate hikes began in March '22 and started affecting inventory by April '22
Time Period | AVG Monthly Listings |
|---|---|
Apr '21 - Mar '22 (prior to hikes) | 5,832 |
Apr '22 - Mar '23 (12-months after hikes) | 15,017 |
Apr '23 - Mar '24 (months 13-24 after hikes) | 13,593 |
Apr '24 - Present (months 25-35 after hikes) | 19,559 |
Price-Per Square Foot (PPSF)
February's overall PPSF was $312.46* and was
- $1.14 less than January
+ $18.80 more than February 2024
106% of the 2024 average of $293.80
Click here for a longer-term Price History.
*NOTE: This overall PPSF is at a record high and not normal in a buyer's market. As best as I can tell, it may be attributed to the number of homes selling for over $5 million dollars in the months of December - February. As a comparison, we can expect 9-10 monthly home sales in this price range. However, December - February averaged 27 homes each selling for an average price of $7.26 million at an average of $958 per-square foot. The highest sale of $21 million was located in Scottsdale.
Price-per square foot is an ideal measurement of home values because it takes into consideration the size of sold homes. Median price does not.
PPSF across the entire Arizona Regional MLS reached a previous high of $303.46 in May '22. Increasing interest rates drove buyers out of the market. Subsequently, prices dropped -$38.76 to a low of $264.70 in December of '22.
Prices started to rise again in January of '23 --- despite interest rates continuing to increase through the end of July '23. Unexpectedly and briefly, prices jumped to a new high of $306.66 in April '24 before settling back to $290.57 in August. That's because April had 30 sales over $5 million.
Month | Price-Per Square Foot |
|---|---|
February '25 | $312.46* |
January '25 | $313.60* |
December '24 | $303.63* |
November '24 | $289.67 |
October '24 | $290.67 |
September '24 | $284.63 |
August '24 | $290.57 |
July '24 | $284.45 |
June '24 | $295.29 |
May '24 | $296.71 |
List vs Sales Price
This is an interesting category you might not find any other place. It's a really good indicator of market conditions. In a seller's market, homes will sell for more than list/asking price. Conversely, homes will sell for less than list price in a buyer's market.
As a point of reference, homes were selling for +$10,100 more than list price in April '22 when we were still in a seller's market and before the effect of increased mortgage rates.
This table also shows the price range of $300K - $600K because it generally accounts for 60% of all sales. It's a contrast to all sales within the Greater Phoenix Area.
+/- Difference Between List & Sales Price
Month | $300K - $600K | All Sales |
|---|---|---|
Feb '25 | -$6,587 | -$14,821 |
Jan '25 | -$7,342 | $-18,092 |
Dec '24 | -$6,737 | -$16,731 |
Nov '24 | -$5,399 | -$12,544 |
Oct '24 | -$5,924 | -$13,297 |
Sept '24 | -$5,880 | -$13,101 |
Aug '24 | -$5,906 | -$13,109 |
Jul '24 | -$4,988 | -$13,856 |
Jun '24 | -$5,585 | -$13,745 |
May '24 | -$5,336 | -$12,982 |
Apr '24 | -$5,163 | -$13,350 |
Mar '24 | -$5,486 | -$12,359 |
Feb '24 | -$6,163 | -$12,136 |
Jan '24 | -$7,174 | -$14,844 |
FOMC Interest Rate Changes
The dramatic change from a seller's market to a buyer's market began when the Federal Open Market Committee (FOMC), a division of the Federal Reserve that sets monetary policy, increased interest rates to combat inflation. To date there have been 11 rate increases and 3 recent decreases. The net affect is a 4.25% increase over a 34-month time span.
The FOMC is continually monitoring factors in the economy to determine their next actions. Although there is a correlation, mortgage rates aren't directly tied to the Fed rate. The economy and yields on 10-year Treasury Bonds affect mortgage rates.
Experts agree it's a challenge to predict what will happen to mortgage rates in 2025. You can find persuasive arguments on both sides, though most agree rates will not return to the 3% range we grew accustomed to during the period of mid-2019 through early 2022. I personally feel anything a range of 5.0 - 5.5 % would be a win for consumers.
Here is the history:
.25% in March '22
.50% in May '22(which was the largest since 2000)
.75% in June '22 (the largest increase since 1994)
.75% in July '22
.75% in September '22
.75% in November '22
.50% in December '22
.25% in February '23
.25% in March '23
.25% in May '23
.25% in July '23
-.50% in September '24
-.25% in November '24
-.25% in December '24
Days on Market
This is another indicator of where the market stands. Low time to sale generally happens in a seller's market and higher days generally happen in a buyer's market. We were in a seller's market before the interest rate increases, and it took about 30-days from listing a home to when it closed escrow. Access our longer term chart for Days on Market.
Month | Days to Sale |
|---|---|
February '25 | 76 |
January '25 | 78 |
December '24 | 73 |
November '24 | 68 |
October '24 | 69 |
September '24 | 68 |
August '24 | 68 |
July '24 | 63 |
June '24 | 63 |
Distressed Properties
43 was the total for February. Distressed properties are bank owned homes and short sales. They disappear when mortgage companies maintain strict lending policies, don't provide borrowers with risky loans, and homeowners make enough money to pay their mortgages.
Distressed properties have been a non-factor for a long time. Click here for our longer-term chart on Distressed Sales. Here are a couple quick facts about distressed properties:
they peaked in March of 2009 at 75.9% of total sales
went under 50% of total sales in March 2012
went under 25% of total sales in April 2013
went under 10% in February 2015
have stayed under 1% since February 2020
Month | Distressed Property Sales |
|---|---|
February '25 | 43 |
January '25 | 30 |
December '24 | 33 |
November '24 | 23 |
October '24 | 25 |
September '24 | 20 |
August '24 | 22 |
July '24 | 26 |
June '24 | 18 |
Ron Wilczek has been tracking and writing about Greater Phoenix Real Estate Market since 2008. He's been a Realtor since 1999 and the broker of Metro Phoenix Homes since 2009. |
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