Will Phoenix Home Prices Drop This Holiday Season?

By Arizona Home Group

Sell your home fast and net thousands more. We’ll make sure you get the absolute top market dollar for your home. We’ve helped thousands of buyers and sellers over the past 30+ years with over 200 5-star reviews.

Is this the winter when the housing market finally tips? The Phoenix market isn’t just going through its usual seasonal rhythm. It’s on the edge of something bigger.

Inventory has spiked, up 18% year over year, and is 76% higher than it was two years ago. That’s not just a seasonal bump but a market reset in motion.

If you’re buying, selling, or just watching from the sidelines, what happens next could shape the entire 2026 market. So what’s driving it? And what should you do about it? Let’s break it down.

A familiar pattern. Yes, we see a rise in listings every fall. Sellers know winter visitors bring fresh eyes and fresh offers. But this year, we’re not starting from scratch. Instead, we’re starting with way more inventory already sitting on the market. That’s where things start to diverge.

Although new listings are being added, buyer activity isn’t keeping pace. So instead of a brisk, balanced market, we’ve got homes piling up and fewer buyers ready to jump in.

Buyers are still on the sidelines. Two words: interest rates. They’ve ticked down slightly in recent months, but not enough to move the needle. Many potential buyers are still waiting for the “big drop” in rates before making a move.

In fact, pending sales have stayed below normal for three years straight. And with no major shift in affordability or financing, that trend is holding strong.

Snowbirds might not save the day. Traditionally, winter brings a burst of demand from snowbirds, especially those fleeing cold northern states and Canada. But 2025 has thrown some curveballs. Canadian buyers are mostly staying home this season, thanks to tighter travel patterns and exchange rate concerns.

Meanwhile, U.S. snowbirds are feeling the pinch from stock market volatility and economic uncertainty, making them a little more hesitant to cut big checks. That means the typical holiday surge of out-of-town buyers might be muted at best.

Are price drops coming? Home prices in Phoenix have actually held up pretty well. From the peak in June 2022 to now, prices have dipped only about 7.5%; a far cry from what we’ve seen in more volatile markets. That’s a testament to the resilience of Phoenix real estate. But high inventory and low urgency usually lead to price reductions, especially if economic concerns continue into the new year.

What this means for buyers and sellers. If you’re actively shopping, this winter might offer more leverage and better selection than we’ve seen in years. Be ready to act when the right home pops up. If you’re selling, you need to be strategic and realistic. Today’s buyers are cautious, selective, and more likely to walk away if a listing feels overpriced or underprepared.

This is our final update of the year, but we’ll be back in January with a full recap of how 2025 played out and what it means for the year ahead in Phoenix real estate.

If you’re planning to make a move soon, call us at (602) 571-3730 or send an email to AHGadmin@gmail.com, You can also reach out to us through our website. We’d be glad to assist you.