Phoenix Real Estate Market 2026: What the Data Actually Shows

Phoenix has been one of the signature Sun Belt growth stories of the past decade. Population growth, warm weather, business relocation, and a real estate market that seemed to only go up.

PropertyIQ scores Phoenix a 45 out of 100 as of February 28, 2026. Here is what is driving that number.

Prices Are Falling

Median home values in Phoenix are down 3.88% year over year as of February 2026. The median listing price is $494,998 — and Zillow forecasts only 1.0% near-term appreciation as of December 2025.

Inventory Is Elevated

There are 19,352 homes for sale in the Phoenix metro as of February 2026, up 11.3% year over year. More listings competing for the same buyer pool is a headwind for price recovery.

Demand Is Weak

Phoenix's demand score is 16.7 out of 100 as of February 2026. For every active listing, only 0.39 homes are going under contract — meaning most listings are sitting. Homes average 55 days on market.

Price Cuts Are Widespread

28.2% of Phoenix listings have taken at least one price reduction as of February 2026. That is the highest rate among the major western metros tracked.

The Affordability Gap Is Significant

Phoenix is approximately 49.2% overvalued relative to local income and rent fundamentals as of February 2026. The income needed to buy at current prices is approximately $131,569 — the median household income in Phoenix is $84,703 (2023 Census). That gap is one reason demand is suppressed.

What Is Working

Phoenix's unemployment rate is 3.5% as of December 2025 — solid. Home sales are up 9.84% year over year as of February 2026, suggesting buyers are returning at lower prices. The long-term fundamentals — population, economic diversification, climate — have not changed.

The score of 45 reflects where Phoenix stands right now: a market working through a supply-demand imbalance and a valuation overhang from the pandemic-era run-up. The correction is ongoing. Investors buying today have more negotiating leverage than they did in 2022, but they are also buying into continued downward price pressure.

PropertyIQ score as of February 28, 2026. Listing and inventory data as of February 1, 2026. Forecast data as of December 2025. All data for informational purposes only.