Is Now a Good Time to Buy or Sell in Phoenix, or Just Another Spin on the Market Carousel?

Every real estate market is a carousel. It goes up, it goes around, it comes back down, and then it climbs again, and the reason it moves is never quite the same twice. Sometimes the push comes from inside the housing market itself, bad loans, too much inventory. Sometimes it comes from somewhere else entirely, a wave of national inflation, a virus, a war on the other side of the world, a trade policy. Phoenix has ridden all of those over the last 50 years, and it is worth seeing the whole ride before you decide what today's turn means for you.

Below is the Phoenix-area home price index back to 1975, tracked annually by the Federal Housing Finance Agency, the same federal data local sources like the Arizona Real Estate Notebook and the Cromford Report build their own reporting on top of. It is plotted on a logarithmic scale, so equal-sized moves look the same size whether they happened in 1982 or 2008, the only way to fit every cycle on one chart.

Seven Rides on the Same Carousel

The 1970s inflation boom (1975 to 1981). National inflation ran hot all decade, the dollar was losing value, and buying a house was one of the few ways regular families felt they could protect their money. Baby boomers were also hitting their first-home-buying years in huge numbers right as this was happening. Phoenix prices climbed every single year of the decade, including a 21 percent jump in 1979 alone, nearly doubling the local index in six years.

The Volcker shock (1981 to 1982). To break that inflation, the Federal Reserve under Paul Volcker pushed the federal funds rate above 19 percent, and 30-year mortgage rates hit a record 18.63 percent in October 1981. Nationally, housing starts collapsed from 2 million in 1978 to just 1.06 million in 1982, the lowest level since the 1940s. Phoenix felt it too, prices dipped nearly 5 percent in 1982, its first down year on record, but the dip was short. Strong in-migration into the Valley cushioned what was a much harsher landing in most of the country.

The 1980s land bubble and S&L bust (1983 to 1990). Rates came back down and Phoenix boomed again, fueled partly by speculative land buying on the west side of the Valley and the aggressive lending habits of savings and loan institutions. Average resale prices peaked around $93,000 in early 1987. Then new tax law changes and the unwinding savings and loan crisis, which hit Arizona, Texas, and California hardest because of how concentrated S&L lending was in those states, triggered a slide. Phoenix home prices fell for 17 straight months into the early 1990s, and the Valley lost roughly 30,000 construction jobs, a 25 percent drop in that industry, between 1987 and 1992.

The long, quiet climb (1991 to 2003). After the S&L hangover cleared, Phoenix spent over a decade in the least dramatic stretch on this entire chart, mid-single-digit annual growth almost every year, powered by steady population growth and a diversifying local economy. No crashes, no manias, just a long, unremarkable climb, which in hindsight is exactly what a healthy housing market is supposed to look like.

The subprime mania and the crash (2004 to 2011). This is the one most people lived through. Lending standards got loose enough that people were approved for loans they could never realistically keep up with, builders kept pouring new subdivisions into the Valley long after real demand had cooled, and prices went vertical, up almost 36 percent in 2005 alone. When it broke, Phoenix fell roughly 50 percent from its 2006 peak to the 2011 bottom, one of the hardest-hit metro areas in the entire country, as a wave of foreclosures and short sales hit an already oversupplied market. It took until around 2019, 13 years later, for prices to fully recover.

Recovery and the pandemic boom (2012 to 2022). Phoenix spent the 2010s clawing back, helped in part by institutional investors buying up distressed inventory in bulk. Then in 2020, mortgage rates fell below 3 percent, remote work let people live wherever they wanted, and a wave of buyers, many relocating to Arizona from more expensive states, poured into a Valley that did not have nearly enough homes for sale. Bidding wars became normal, and prices jumped to a new all-time high in 2022. That was a supply and demand problem, not a bad-lending problem, too many buyers chasing too few homes, turbocharged by historically cheap money.

Today: war, tariffs, and normalization (2023 to 2026). The ride we are on now has yet another kind of engine. Since late February of this year, the United States has been engaged in a war with Iran, and that conflict has rattled oil prices, bond markets, and inflation expectations in a way that has pushed mortgage rates sharply higher, from around 6.2 percent before the war to above 7.4 percent as of this October. On top of that, tariffs put in place over the last year and a half have been working their way into consumer prices the entire time, adding real, measurable cost to everyday goods on top of whatever the war is doing to gas and bond yields. None of that is a credit crisis like 2008. It is an affordability squeeze caused by forces largely outside the housing market.

The Cromford Report, the Valley's most closely watched source for real-time market data, describes the last 18 to 24 months as a normalization, not a downturn. Senior analyst Tina Tamboer has pointed out that Greater Phoenix's demand-supply index sits at 80, below the 90 mark that typically signals buyers have real leverage, calling it one of the best buyer opportunities in years. Pricing in the sub-$1 million range has softened roughly 2 to 3 percent, and some mid-tier neighborhoods remain 10 to 15 percent below their 2022 highs, even while the Valley's broader median sale price, around $484,500 as of this October, holds close to its all-time high. Different corners of this market are telling slightly different stories right now, which is itself very on-brand for Phoenix real estate.

Here Is the Part the Ups and Downs Can Hide

Go back and look at that chart one more time, but this time follow the lows instead of the highs. The 1990 bottom, after the entire S&L bust ran its course, still sat higher than the 1981 peak that came before the Volcker shock. The 2011 bottom, the worst point of the worst housing crash in Phoenix's modern history, still sat at an index of about 103, which is already higher than the entire 1980s boom ever reached at its best moment in 1987. And since the 2022 peak, the index has not actually posted a single down year. It has only slowed down, still inching to a new high in 2025. Every rough patch on this chart eventually gave way to a bottom that sat above the top of the boom before it.

Zoom out far enough and the carousel is also climbing a hill the whole time it spins. From 1975 to 2025, the Phoenix index moved from about 29 to about 351, a roughly twelvefold increase, which works out to around 5 percent a year, compounded, for fifty straight years, through two of the worst housing downturns in American history. The ride never promises a smooth year. It has, so far, kept promising a higher floor on the other side of every drop.

What People Are Actually Googling Right Now

The questions I hear from clients are almost word for word the questions showing up most in search right now: is it a good time to buy a house, will home prices drop, is there going to be a crash, are we in a buyer's market or a seller's market, what are rates doing today. Every one of those is a fair question. None of them has a clean yes or no answer, and anyone who gives you one with total confidence is guessing.

Here is what I can tell you with more confidence: nobody serious is forecasting a repeat of 2008. As you just saw, this slowdown is an affordability squeeze from a 30-year rate north of 7 percent, not a foreclosure flood, and those are very different mechanics even when the headlines sound similar.

Do Midterm Elections Actually Move the Market?

With a midterm election coming up, I get this question a lot right now. Mortgage rates have tended to wobble around midterm cycles, often tied to Federal Reserve moves more than the election itself. In 2022, Freddie Mac's own weekly survey shows the average 30-year rate climbing from 5.66 percent in early September to just under 7 percent by the time voters went to the polls in early November. This year is different, the bigger push on rates started back in February with the Iran war, well ahead of midterm season. But rate wobbles, from any cause, are not the same as a market collapse. Research going back to 1987 shows home price appreciation in election years has actually run slightly ahead of non-election years, and sales have rebounded the year after nearly every presidential election on record. The bigger drivers of this market, long term, are population growth, how many homes are available, and the broader economy, not who is on the ballot.

Why Buyers Still Need to Buy and Sellers Still Need to Sell

Here is the part the headlines leave out. A chart can tell you where the index sits. It cannot tell you whether this is the year you are having a baby and need another bedroom, the year your job is relocating you to the Valley, the year your parents need to be closer, or the year you are finally ready to downsize out of a house that has gotten too big and too quiet. Those reasons do not wait for a market to hit some theoretical bottom. They happen on their own timeline, and for most people, that timeline matters more than a headline.

Buying a home is also, at its core, subjective. The "right" house is not a spreadsheet output. It is the one that fits how you actually want to live, in a neighborhood that feels right to you, at a payment you are comfortable carrying. I have had clients buy in markets that were supposedly "bad" and love the decision for fifteen years, and I have had clients wait for a market that never quite arrived the way they pictured it. Nobody, including the best analysts in this business, can tell you with certainty where the line on that chart goes next. What I can tell you is that it has never stopped moving, in either direction, for very long.

The carousel keeps turning no matter what is pushing it that year, bad loans, a pandemic, a war and a round of tariffs. It has crashed, it has boomed, it has cooled, and it keeps carrying people home. Whichever part of that cycle we happen to be in when you are ready, my job is to help you read the ride clearly and move with confidence, not to pretend I can tell you exactly where it stops next.

Home is Everything

Your AZ Real Estate Go-To Girl,