Heading into the final weeks of summer, pricing appears to have stabilized, with plenty of competition in the marketplace—although sales activity has been low. For the first time in more than 18 months, median sales prices remained unchanged at $480K by the end of July. Overall, supply is down more than 9% since the year’s high at the end of April, and has decreased faster than demand. Expired and cancelled listings are up significantly from last year, as many sellers have decided it is not worth it to keep their properties on the market in the current environment.
Trustee sales have ticked up slightly in 2025, but some perspective is in order. A majority are occurring in newer home communities where builders had bought down interest rates in 2021-2022 to improve affordability for buyers—but those lower rates also resulted in higher pricing. Since then, as interest rates climbed and stayed higher, values have come down. According to the most recent figures, there are about 1,300 active residential notices of trustee sales, which is 38% higher than a year ago but has remained flat since February. Again, for perspective, in March 2009 there were nearly 11,000 active notices.
Supply Down from Peak and Remains Low
- Q2 ended with 26,780 new listings added, up 6.9% over last year but more subdued compared to the 17% increase in Q1. As we begin Q3 with 4,499 new listings as of the end of July, down 4.7% from last year, counts are at their second lowest recorded in 25 years. The record low was in 2023.
- At this level, there are not enough new listings to replace those that go under contract, cancel, or expire. Therefore, overall supply has continued to decline and is down 9.4% since the 2025 peak on April 26.
- The only supply count that continues to grow is single-family homes under $400K, which is good news for first-time homebuyers. There were 2,256 listing cancellations in June, up 46% over last year. There were 990 expired listings, up 78% over last year. This level of cancelled and expired listings in June hasn’t been experienced since 2014, when supply was at a similar level.
- Seasonally, May and June are the peak months for expired and cancelled listings in the luxury market. Due to this phenomenon, over the course of 8 weeks Paradise Valley experienced a 41% drop in active listings. Over the same 8 weeks, listings under contract and closings remained constant. The result was a flipping of the table between supply and demand, launching Paradise Valley to the #1 seller market seat in Greater Phoenix. This is a nice reprieve for sellers, but it will most likely only last through September. October is typically the second biggest month behind January for new luxury listings, which could push Paradise Valley back into a balanced state.
July Home Sales Outperform ’23 and ’24
Closed sales totaled 19,804 in Q2 2025, up just 0.7% over last year. Q3 is looking up so far as July sales are outpacing last year by 3.5%, the equivalent of 8 extra closings per day. This time it’s not the luxury market increasing sales, but homes under $600K. The 4th of July landed on a Friday this year, which meant two weeks of slow contract activity instead of just one, as some people took the 4 days prior for vacation, and some took the 5 days after. Even with the double whammy, both weeks combined outperformed 2024 by 4%. The third week of July also showed a significant rebound, up 13% over the prior week, up 8% over 2024, and even up 4% over 2023.
Mortgage applications for home purchases, often considered a predictor of future contracts, nationally continue to outperform 2024 as well, according to the Mortgage Bankers Association; up 22% over last year and giving hope for a decent summer. This hasn’t been realized yet because most applicants probably need to sell their home first before making an offer on another. Still, a reason to be cautiously optimistic for better days ahead.
Redfin released yet another study in July gaining traction in the headlines—this time stating that “1 in 7 Pending Homes Sales Fell Through Last Month” and citing Phoenix among the cities with the highest cancellation rates at 18.3%. While the figure may be accurate, it’s not an alarming number historically for June. In fact, escrow fallouts were 20% of listings under contract in June 2019, which was pre-pandemic and a strong seller’s market. The highest cancellation rate recorded in the past 10 years was 25% in March 2020, the beginning of the pandemic shutdown.
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