Market Summary for August 2025, with July Data in:
Here is a summary of the market overview by Tina Tamboer at The Cromford Report - using the Arizona MLS numbers as of August 1, 2025, compared with August 1, 2024.
The major news is that, while most of the Valley has a balanced supply or an oversupply of listings favoring the buyer, the Cromford Index (a ratio of supply to demand) is no longer moving in favor of the buyer. This shift may have paused and could be about to swing back toward a seller’s advantage.
The key questions are:
● How long will this buyer advantage last?
● Will it soon begin to shift in the other direction?
● Will we see seller concessions disappear?
Now is a good time for buyers to act, especially if they plan to hold a property for several years. We cannot know when the bottom of the market has been reached until we have passed it and can look back at the data, but current trends suggest we may be close.
If interest rates fall closer to 6%, many buyers are likely to re-enter the market, while the supply of homes will still lag behind, strengthening prices. This means that now is an ideal time for buyers who do not have large cash reserves or top-tier credit scores, which are often necessary to compete and pay above appraisal in a crowded, competitive, and appreciating market. In a rapidly rising market, a home is likely to appraise for less than the price the market values it at, as appraisals are based on past sales and cannot fully reflect current conditions when prices are climbing quickly.
In this buyer’s market, we generally see more listing cancellations and expirations when the price and condition of homes are out of line with buyers’ needs and expectations, or when sellers do not want to be inconvenienced, believing there are very few buyers in town.
In our luxury communities, supply typically decreases with the summer heat as homes are removed from the market with plans to return in “the season” this fall. However, because the Valley is both a major metropolitan hub and a growing tech center, luxury homes for executives remain in demand, particularly before the start of the school year. Unfortunately, summer supply is limited. Sellers need to realize that IF their home is likely to appeal to an incoming executive or a family, summer is not the time to take a well-priced, move-in-ready home off the market, buyers are here.
We are also seeing the effects of the April tariff announcements, which have created uncertainty in the market. Still, sales remain strong under $600,000 and in the luxury segment, where buyers are shopping in a much smaller pool of homes than during peak season. That limited supply, combined with steady demand, has pushed the Paradise Valley market into a strong seller’s market for July, with similar, though less pronounced, trends in other luxury communities such as Scottsdale and Cave Creek.
Analysts, including those at Cromford, expect interest rates to remain in the 6–7% range through 2025. As of August 7th, conventional rates were at 6.55%, while Jumbo loans were at a 6.375% rate with a 6.386% APR. The memory and hope of 3% mortgages is becoming more distant, and analysts project that a rate close to 6% would be sufficient to provide a stimulus to home sales.
Another potential market driver is price. In areas where buyers are scarce and listings continue to come on the market, data suggests that a 2%–5% drop in sales prices may be warranted. In high-supply markets, prices could fall by as much as 8%. Condominiums and leasehold properties are generally more susceptible to value declines than fee-simple, single-family homes.
While some pundits are forecasting a downturn or a wave of foreclosures, current Valley data does not support this. Incoming business remains strong, and housing supply continues to grow more slowly than demand.
We are not seeing any significant volume of pre-foreclosure notices that would raise concern. The small number of foreclosures currently present is only notable because the previous baseline was near zero, making even a handful of cases appear as a large statistical increase. In reality, the figures remain too low to signal trouble, and there is no pre-foreclosure data suggesting a future spike.
While the market is undeniably in a period of uncertainty, buyers who need to purchase now are moving forward, and motivated sellers are receiving top dollar for homes that are accurately priced and in excellent condition.
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