PHOENIX (AZFamily) — Phoenix-area home sales dropped in January compared to December, continuing a pattern that has occurred every January for at least the past 10 years.
But when comparing January 2026 to last year, sales increased, particularly in the luxury market.
Luxury homes see growth
Home sales over $1 million increased 10% year-over-year, according to Sindy Ready, past president of Arizona Realtors and a real estate agent for nearly 30 years.
“Interestingly, January compared to January of 2025, in the luxury division which would be over a million dollars, it actually increased 10% year-over-year, so different price points are doing different things,” Ready said.
Overall, home sales are up slightly year-over-year in the Phoenix-metro.
Sellers adjust strategies
Ready said sellers are becoming more realistic with pricing and offering incentives to buyers.
“We think things are going to continue to stay pretty stable, what’s happening is sellers are starting to get a little more realistic on their pricing, and they are also offering some incentives to buyers, maybe being willing to pay some of the closing costs or buying down their interest rates a little bit,” Ready said.
Mortgage rates drop from last year
Current mortgage rates sit around 6% for a 30-year fixed loan, according to Mortgage News Daily. This time last year, rates were closer to 7%.
Ready expects rates to stay around 6% for the first half of the year.
“If the interest rates start to adjust down a little more, toward 5.5%, it’s going to put more demand on the market which means as a buyer you could be back in a situation with multiple offers,” Ready said.
The median sales price in the Phoenix area was around $445,000 last month, about $5,000 less than December’s median price.
The median new list price was $485,000 last month, indicating sellers often drop prices from their initial listing price.
Growth shifts to outskirts
While central Phoenix has limited room for new construction, growth is happening in other areas of the Valley beyond the north I-17 corridor where a new chip plant is being built.
“We have chip plants being built out in Goodyear and Buckeye, there is so much going on, and then a lot of technology way out in the East Valley, Mesa, Gilbert, San Tan area, so lots going on all the outskirts of town and a lot of new build going on in those areas as well,” Ready said.
Ready adds some clients are leaving central locations for larger, newer homes on the outskirts.
Ready is working with a couple who wanted to stay in central Phoenix but found better deals in Surprise, where a builder offered a 3.99% interest rate and $8,000 toward closing costs.
The trade-off typically involves a longer commute but access to new construction with lower mortgage rates.
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