2026 Begins
With the year so newly begun, we have scant evidence to confirm this year’s emerging trends. But it can be useful to compare today with a year ago. New listings are coming in more slowly; the Cromford Report shows them arriving at a rate 2.5% lower than last year. But to put this in perspective, it still is a better rate than 2020-2024 which had the lowest counts in 25 years for January new listings. As usual, the devil is in the details. It is actually one price segment – listings under 300K – that are seeing a significant increase, amounting to 15% over last year. The listings are primarily condos and mobile homes in Phoenix and Mesa combined with single family homes in Pinal county. The increased supply has pushed sales prices down 2-3% from last year and they are still continuing to decline. All other listing counts are in line with last year or weaker which is bringing the rest of the market close to balance between supply and demand.
What bodes well for first quarter sales is interest rates. Most of 2025 saw rates in the high 6% to low 7% range – while currently rates are in the high 5% to low 6% range. That means the same priced home has a payment of 10-12% lower. For the sub-luxury market this is critical. How will that impact pricing? We turn again to the Cromford Report:
While sales are expected to increase, prices are not. Price is the last measure to move when a market shifts, and it can take up to 3-6 months to emerge. Price appreciation remains stagnant in the middle price ranges, rising in upper ranges, and declining under $400K. Greater Phoenix is pulling out of a buyer’s market and edging towards a balanced state, but a seller’s market isn’t on the horizon.
As the evidence continues to mount as to the market direction, as always we will keep you apprised here first.
Russell & Wendy Shaw
(Mostly Wendy)