A Market in Transition: Supply, Demand, and Rates Tell a More Complex Story in Phoenix, Arizona.

A Market in Transition: Supply, Demand, and Rates Tell a More Complex Story in Phoenix, Arizona.

The number of cities moving in a buyer-friendly direction has increased from 6 to 9 since last week, now matching the number of cities trending in favor of sellers. That balance alone tells us the market is finding its footing again.

The average Cromford® Market Index (CMI)* slipped 0.3%, essentially flat and a notable shift from last week’s +2.1% move toward sellers. In short, the recent seller momentum has faded, and the overall market is drifting slightly downward again.

What’s driving the shifts? The strongest moves in favor of sellers are occurring in large, central markets—Phoenix, Mesa, and Glendale. Meanwhile, outlying areas are leaning more buyer-friendly, including Fountain Hills, Cave Creek, and Queen Creek, which are among the most buyer-favored markets right now.

Paradise Valley continues to move toward buyers due to a meaningful increase in supply, though demand remains strong enough to keep it in the balanced zone (CMI between 90–110). Scottsdale remains a seller’s market but has entered a mild weakening trend.

Year-Over-Year Comparison

(ARMLS – All areas & property types | January 25, 2026 vs. January 25, 2025)

Supply – Up

• Active listings: +9.7% (24,318 vs. 22,169)

• Average active $/SF: +2.0% ($367.14 vs. $360.10)

• Cromford® Supply Index: +11.0% (84.4 → 93.7)

Demand – Also Up

• Pending listings: +3.0% (4,172 vs. 4,052)

• UCB / CCBS listings: +9.4% (3,083 vs. 2,817)

• Pending $/SF: –3.0% ($328.87 vs. $339.16)

• Closed sales YTD: +4.9% (3,266 vs. 3,112)

• Cromford® Demand Index: +8.9% (76.5 → 83.3)

Pricing – Mixed

• Average closed $/SF: +1.0% ($309.59 → $312.72)

• Median sales price: –1.4% ($451,000 → $444,900)

Market Balance

• Contract ratio: –3.7% (31.0 → 29.8)

• Days of inventory: 134 days, up 6.3% year-over-year

• Cromford® Market Index: 88.9, down 1.9% from 90.6

The Big Picture

Overall, the market looks remarkably similar to this time last year, especially in pricing. The major difference? Mortgage rates.

The typical 30-year fixed rate is now around 6.19%, down from 7.06% a year ago—a drop of 87 basis points (about 12.3%).

If interest rates alone dictated market behavior, we’d expect a much bigger shift than what we’re seeing. The reality, as always, is more nuanced—inventory levels, pricing psychology, location, and buyer behavior are all playing meaningful roles.

Bottom line: This remains a market where strategy matters, and hyper-local insight makes all the difference.

*Cromford Market Index™ is a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active, and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

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Market in a Minute

Housing

• The market is rebalancing. Buyer-friendly cities now match seller-friendly cities (9 each), with momentum leveling out after last week’s seller surge.

• Supply and demand are both rising—but prices are steady. Listings and pendings are up year over year, while prices remain mostly flat, signaling a more negotiated market.

• Location matters more than ever. Central areas like Phoenix, Mesa, and Glendale favor sellers, while outlying markets are tilting toward buyers.

Economy

• Fed holds rates steady. Inflation and employment remain firm, keeping the Fed cautious. Any future rate cuts will take time and broad agreement.

• Strong GDP, soft jobs. Economic growth is solid, driven by consumer spending, but job creation remains weak—raising questions about sustainability.

• Rates stay stable. Mortgage rates are holding near 6.10%, with markets expecting no cuts through at least March and possibly April.

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This weeks Weather

This week in Gilbert is shaping up beautifully — mild mornings, warm afternoons, and plenty of sunshine. 🌤️

With highs hovering in the upper 70s to low 80s and comfortable evenings, it’s the kind of Arizona winter weather we all love.

Perfect conditions to get outside, enjoy the Valley, and take in the Waste Management Open — whether you’re on the course, at the 16th hole, or watching from afar.

No matter the temps, it’s always a great week to live in Arizona. 🌵☀️ Brad Daniels, Realtor® | My Home Group

www.RelocateToAZ.com | (602) 679-1025