As 2025 comes to a close, the Phoenix real estate market continues to evolve in ways even seasoned investors didn’t see coming. This year alone, conversations with owners and buyers have ranged from “Should I offload a property before rates change again?” to “Is now the time to buy another rental?” to the big one: “What will 2026 look like?”
There’s no shortage of opinions out there—but the data paints the real picture.
Below is your end-of-year breakdown: appreciation trends, rental performance, and what property owners and investors should prepare for as we move into 2026.
Holiday Season Slowdown… Usually
The end of the year typically brings a predictable slowdown.
People don’t want to move during Thanksgiving. They don’t want to move during Christmas.
And if you’re a landlord, you’ll hear us emphasize—loudly—that winter is the worst time of year to have vacancy.
But this year defied expectations again.
Rental Activity Stayed Strong in Late 2025
Compared to late 2024, rental demand this November was noticeably stronger. While the market is not red-hot, activity levels are healthier than we typically see in Q4.
This could be an early indicator of demand shifting upward heading into 2026.
Appreciation Trends: Phoenix Is Still in a Flat-to-Negative Zone
Using Cromford Report data, the most trusted MLS analytics in the Valley, we’re seeing a continuation of a trend that started in late 2024:
Phoenix remains in a mild depreciation pattern.
This marks the first extended dip below zero since the early 2000s.
At the start of 2025, Phoenix was still hovering around low single-digit appreciation, but as we close out the year, the trend remains flat—or slightly negative.
This matters.
Many investors who purchased between 2022 and 2025 were counting on appreciation to help offset higher financing costs. But the muted appreciation environment means the math is tighter than many anticipated.
The Fringe Cities: From Late Bloomers to Stabilizers
A couple of years ago, fringe markets like Maricopa, Queen Creek, San Tan Valley, and Buckeye were struggling to keep up with metro Phoenix demand.
In 2024 and early 2025, they surged back—hard.
But now they’ve stabilized.
Queen Creek, for instance, saw strong appreciation into late 2024, peaked, and gradually leveled out through 2025.
These areas followed a predictable pattern:
- Lag the Phoenix metro
- Catch fire late
- Settle back into stability
This is normal for fringe markets—but it’s also a sign buyers are still chasing affordability, even as interest rates fluctuate.
Scottsdale & Paradise Valley Continue to Break the Rules
While Phoenix and its fringe cities behave like traditional metro markets, Scottsdale and Paradise Valley refuse to participate in the same cycle.
Scottsdale Continued Appreciating Through 2025
It has yet to see sustained depreciation through this cycle. Luxury demand, cash-heavy buyers, and strong new-build activity continue to prop up values.
Paradise Valley: High Variance, High Confidence
PV appreciation continues to swing wildly, but those swings come from:
- A small number of high-value sales
- Seasonal listing patterns
- A wide range of property price points
The volatility doesn’t reflect instability—just small sample sizes and ultra-luxury behavior.
January 2026 Will Bring a Wave of Listings
Right now, a large number of listings across the Valley are quietly being pulled from the market. Why?
To “reset” days on market heading into the new year.
After 45 days off the MLS, a property returns as Day 0.
Perception matters—especially in January.
And January in Phoenix is uniquely powerful:
- Barrett-Jackson Auto Auction
- The WM Phoenix Open
- Major tourism and relocation season
Every year, these events bring in buyers—especially cash buyers—who fall in love with the Valley and decide to jump into real estate.
Expect a surge of attractive, refreshed listings in early 2026.
Rents Declined in 2025 and Will Continue to Flatten in 2026
One of the most misunderstood parts of this market is the rental side.
Rents went down in 2025.
Most owners expect rents to rise every year, but this cycle has shown the opposite.
And relying on outdated rent estimates can be dangerous—especially for investors evaluating hold vs. sell decisions.
We’ve seen multiple cases this year where properties were listed thousands above achievable market rent—even after sitting vacant for months.
Today’s rents must be estimated by those who manage rentals daily, not by outdated comps or optimistic projections.
If You Purchased Between 2022–2025, It’s Time for a Strategy Check
Anyone who bought during the elevated-rate, elevated-price cycle needs to take a hard look at their numbers.
This includes:
- Cash flow
- Market rent reality
- Appreciation trends
- Repositioning opportunities
- Refinance windows
A cookie-cutter answer doesn’t work here. Every property requires a case-by-case analysis.
2026 Market Outlook: What We Expect
Here’s the forward-looking summary:
Key Takeaways
• Phoenix is still experiencing mild depreciation or flat appreciation
• Luxury markets continue to outperform the rest of the Valley
• Fringe markets have stabilized after sharp increases
• Rents remain flat and must be evaluated carefully
• Expect strong listing activity early 2026
• Investors from the 2022–2025 buying cycle should reassess strategy
Opportunities in 2026
- Better buying environment with less competition
- Stronger long-term rental positioning
- More negotiable sellers
- Potential rate movement creating opportunity windows
Thinking About Your Next Move? Let’s Run the Real Numbers.
If you’re considering buying, selling, holding, or converting a property to a rental in 2026, now is the time to evaluate your strategy with real data—not assumptions.
We can help you:
- Understand your property’s true rental value
- Analyze appreciation and market position
- Model sell vs. rent outcomes
- Identify hidden risks and opportunities
Reach out anytime for a personalized analysis of your property and investment goals.