The Phoenix real estate market started 2026 with some interesting shifts. After analyzing the latest ARMLS data and discussing trends with top agents in our mastermind, here's what you need to know for your client conversations.
The Big Picture: A Balanced Market
After years of extremes — both the feeding frenzy of 2021-2022 and the sudden freeze of 2023 — the Phoenix market is finding equilibrium. We're in what economists call a "balanced market," which actually creates unique opportunities for prepared agents.
What "balanced" means in practice:
- Neither buyers nor sellers have significant leverage
- Negotiations are happening on both sides
- Contingencies are back (inspections, appraisals, financing)
- Quality listings still move quickly
- Overpriced listings sit
Key Trends We're Seeing
1. Inventory Is Up (But Not Dramatically)
Active listings increased 12% compared to January 2025. While this gives buyers more options, we're still well below pre-pandemic levels. The key insight for clients: you have choices, but good properties still attract multiple offers.
2. Price Reductions Are Common
Approximately 28% of listings have had at least one price reduction. This isn't a crash — it's a correction. Sellers who priced ambitiously in Q4 2025 are adjusting to reality.
Conversation starter for sellers: "Let's price strategically from day one. The data shows overpriced listings average 67 days on market versus 28 days for well-priced homes."
3. Interest Rate Sensitivity
Buyers are incredibly rate-sensitive right now. A half-percentage point change in rates impacts purchasing power by roughly $30,000 at the median price point. Agents who monitor rates daily and have lender relationships are winning.
4. New Construction Competition
Builders are active again, offering incentives that resale sellers can't match: rate buydowns, closing cost credits, upgrade packages. Your listing presentation needs to address this head-on.
What Buyers Need to Hear
The opportunity: This is the most buyer-friendly market we've seen in 3 years. You can:
- Include contingencies again
- Negotiate repairs
- Ask for seller concessions
- Take time to make decisions
The reality check: The best properties still move fast. Be pre-approved, be ready to view quickly, and be prepared to act when you find "the one."
What Sellers Need to Hear
The strategy: Price for the market you're in, not the market you remember.
- Get a professional pre-listing inspection
- Stage strategically (ROI is 5-15%)
- Professional photography is non-negotiable
- Be ready to adjust if no showings in 14 days
The mindset: You're not "losing money" if you sell for less than peak 2022 prices. You're capturing equity gains from the past decade.
Neighborhood Spotlight: Where the Action Is
Our mastermind agents reported the strongest activity in:
East Valley (Mesa, Gilbert, Chandler):
Family-friendly neighborhoods with good schools continue to see multiple offers on move-in ready homes under $500K.
North Phoenix (Deer Valley, Desert Ridge):
New construction is competing aggressively, but established neighborhoods with mature trees are holding value well.
Scottsdale (South of Shea):
Luxury market ($800K+) is slower but steady. Cash buyers have leverage.
Looking Ahead: Q1 2026 Predictions
Based on current trends and conversations with lenders and title companies in our network:
- February: Typical seasonal slowdown. Good time for buyer clients who want less competition.
- March: Spring market kicks off early. Listings will surge.
- April: Peak season begins. Expect 20-30% more transactions.
Your Action Items This Week
- Update your market presentation — Use these stats in your buyer/seller consultations
- Reach out to your database — "Thought you'd find this market update interesting..."
- Check in with past clients — Especially those who bought in 2020-2021. Equity check!
- Review your listings — If they've been on market 30+ days, it's time for a strategy conversation
Want Deeper Market Insights?
Our mastermind members share real-time data from their transactions every month. Get insights you won't find in public reports.
Join Our Next Meeting →Data sourced from ARMLS, InfoSparks, and mastermind member transaction reports as of January 20, 2026. Statistics are for Maricopa County residential sales.