Summer Is Heating Up, But the Housing Market Has Cooled
As we officially move into the summer season, Arizona temperatures are climbing — but the housing market has cooled compared to the stronger seller markets we have seen in recent years. Inventory has started to fall, which is good news for sellers, but demand remains below long-term averages, giving many buyers continued negotiating power, especially under the $1 million price point.
The market is showing some interesting shifts as we move into the summer months. Active listings without a contract are now falling and are down more than 4% compared to this time last year. When we include homes under contract accepting backup offers, such as UCB and CCBS listings, supply is still down from last year, but only by about 2.3%.
The peak in active listings for the year now appears to be behind us. Unless something unexpected changes, listing counts should remain lower until they typically start rising again around September. Overall, this movement in supply is favorable to sellers.
The slightly less favorable news for sellers is that demand is moving in a direction that benefits buyers. Listings under contract are down noticeably from last month, although they are still higher than this time last year.
Closed sales are also up almost 6% compared to a year ago. This is a fair comparison because both May 2025 and May 2026 had 21 working days. May 2026 was slightly slower than April, down about 2.5%, but that is actually better than it looks. April had 22 working days, so sales would have needed to drop around 4.5% in May just to be running at the same pace. Since the drop was only 2.5%, that is a positive sign.
Overall, supply is just above normal, while demand remains well below long-term averages. This means buyers still have an edge in negotiations, especially in the more typical price ranges up to about $1 million. Above $1 million, we are seeing unusual strength in the market, which appears to be tied closely to the strength of the stock market.
Pricing remains stable, but there is an important point to understand. With inflation running around 3.8% annually, stable home prices actually mean homes are becoming less expensive in real terms. For example, a median-priced home at $455,000 would need to rise to approximately $472,290 just to keep pace with inflation. If that same home is still worth $455,000 twelve months later, it has effectively lost about $17,290 in inflation-adjusted value.
The takeaway is this: the market is not crashing, but it is also not the overheated market we saw a few years ago. Buyers still have negotiating power in many price ranges, while sellers benefit from the fact that overall supply is now moving lower. As always, the right strategy depends heavily on price point, location, condition, and competition.
If you have questions about what this means for your home, neighborhood, or buying plans, I am always happy to help.
