Last month, I noted that we were seeing the highest number of homes for sale in the Phoenix market in nearly a decade—yet many buyers remained hesitant. Has anything changed since then?
The short answer is: yes. The number of homes for sale dropped by nearly 3.5%. While that might sound encouraging for sellers, the decline isn’t due to a surge in sales. Instead, many listings simply expired or were cancelled as frustrated sellers left the market. It’s understandable—this summer’s buyers have been unpredictable.
When will demand pick up meaningfully? That’s a longer conversation with several moving parts.
The luxury market continues to perform relatively well, though it naturally slows during summer as both high-end buyers and sellers travel. Meanwhile, broader market activity hinges on three key factors: lower interest rates, declining asking prices, and overall consumer confidence in the direction and stability of the stock markets.
Mortgage rates are still influencing decisions, even in the luxury segment. While high-end buyers tend to be less rate-sensitive, a drop in interest rates would likely spark more activity across all price points.
As for pricing, despite what some sensational headlines suggest, we’re not seeing a market “crash.” The sky is not falling. It’s really more of a steady cooling trend. Buyers do have more leverage right now, often negotiating a combination of price reductions, seller concessions, and repair credits. I’ve seen some sellers reduce their asking prices over time by as much as 10% and more, signaling a shift from “aspirational pricing” toward market reality.
Economic uncertainty is another hurdle. Stock market volatility—driven in part by unpredictable tariff policies—is keeping many buyers cautious. LPL Research’s recent mid-year report summed up today’s outlook well with the title: “Pragmatic Optimism, Measured Expectations.”
You’ll be reading this edition of the CITYSunTimes around the same time the Fed decides on interest rates, and also when the latest tariff deadline looms. Will the Fed cut rates or hold steady? Will tariff policies change again? Will ceasefires actually hold?
To borrow a line from one of my favorite songs from the band Chicago: “Does anybody really know what time it is?”
These are uncertain times, no doubt. But looking beyond the headlines, the long-term outlook for the Phoenix metro area remains strong. Stay optimistic—August may yet surprise us.
This content is sponsored by Darrell Doepke, a realtor with Berkshire Hathaway HomeServices Arizona Properties. He can be reached at 480-440-6946 or email at darrell.doepke@bhhsaz.com.