March 2025: Phoenix is Heating Up—Literally & Market-Wise!

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View this email in your browser Spring has sprung—and with it comes a fresh batch of insights, trends, and a few wake-up calls for buyers, sellers, and investors alike. From shifting condo inventory to Zillow turning bearish, and from the rise of build-to-rent to a looming $384B commercial risk, this month's stories hit hard. Whether you're hunting for a condo, exploring commercial plays, or just keeping tabs on the Valley's wild ride, this month's issue is packed with perspective. Market Snapshot🎯March 2025 🏜️ Phoenix, It's Time to Go Back to the (Desert-Friendly) Drawing Board Phoenix is booming, but are we building homes that truly respect the desert environment? Inspired by Frank Lloyd Wright's principles, it's time to rethink how we design for the Sonoran heat. Lessons from Wright Frank Lloyd Wright's designs, like Taliesin West, worked with the desert rather than against it. Features like thick walls, natural ventilation, and locally sourced materials were sustainable and functional. Compare this to modern builds with glass-heavy facades and black rooftops that clash with the environment. A Call for Change Phoenix developers can embrace architectural styles like Desert Modern, Pueblo Revival, and Mid-Century Modern. Features such as shaded courtyards, water-harvesting roofs, and adobe-style insulation not only blend with the desert but also offer lower energy bills and higher resale value. The Future of Phoenix As climate change intensifies, building homes suited for the desert is not just about aesthetics—it's about survival and quality of life. Buyers are willing to invest in homes that stand out and are tailored to the environment. Let's make Phoenix a city that thrives in the desert, not just one that looks good on Instagram. Now go check out the Bloomberg piece that kicked this whole thing off. It's actually legit: 👉 Phoenix Can Learn From Frank Lloyd Wright's Desert Architecture Phoenix: The Build-to-Rent Capital of America—and It's Not Even Close Phoenix is making waves in the real estate world, and it's officially the Build-to-Rent (BTR) capital of the U.S. Over the past five years, BTR housing in the Valley has skyrocketed by 309%, outpacing every other city. In 2024 alone, Phoenix added 4,460 new single-family rental homes—more than any other city in the country. One of the largest developments, The Bungalows on Camelback, introduced 334 single-family rentals, ranking third nationally for BTR projects this year. What's driving this boom? A combination of strong demand for rentals, plentiful developable land in Phoenix's suburban areas, and an investor-friendly market. With interest rates still fluctuating, many prefer renting a new home instead of committing to a hefty mortgage. Looking ahead, more than 13,000 BTR homes are set to hit the Valley, keeping Phoenix firmly at the forefront of this growing trend. Zillow Turns Housing Bear… But Phoenix Still Has Some Fight Left in It Zillow just downgraded its 2025 housing forecast, now predicting a 1.7% national price drop. Rising inventory and affordability issues are shifting the market. But Phoenix is still holding on, with Zillow projecting +1.2% price growth locally. 🚨 Maricopa County inventory is up 55% year-over-year — from 12,262 to 19,069 homes — giving buyers more leverage. Reddit's buzzing, ResiClub broke it first, and we're watching closely. 👉 Read the full post for market insights + hot takes. The $384 Billion Time Bomb💣: Is Commercial Real Estate the Next 2008? Commercial real estate (CRE) is facing an unprecedented wave of loan extensions, with a jaw-dropping $384 billion deferred into 2025—a 40% increase compared to the previous year's maturities. These extensions are concentrated in commercial mortgage-backed securities (CMBS) and bank loans, with multifamily and office properties leading the surge. As lenders defer loans further into the future, many are warning of an inevitable reckoning. Drawing parallels to the 2008 financial crisis, today's trouble lies in rising refinancing costs rather than reckless lending. Office spaces and multifamily properties are among the hardest hit, while regional banks are left teetering on the edge. Why might this NOT be another 2008? Stronger banking regulations and a localized CRE crisis could limit the fallout—but it's hard to ignore the similarities. The big question remains: when will the reckoning occur? Loan extensions can only kick the can down the road for so long. Now is the time to prepare, save, and strategize—because when the fallout comes, those who are ready will weather the storm. 📬 March 2025 Condo Market Snapshot By PhxCondosForSale.com — Contributor to Arizona Real Estate Insider 🔥 Phoenix Inventory: 5.67 months (down from Feb, leaning balanced) Median Price: $380,000 Days on Market: 53 Sold-to-List: 97.2% 📌 Solid pricing + balanced pace = good time to list or buy 🌵 Scottsdale Inventory: 5.77 months (down from 8.75 in Feb) Median Price: $615,000 Days on Market: 55 Sold-to-List: 97% 📌 Inventory dropped fast — buyers still have options, but sellers gaining edge 🎓 Tempe Inventory: 4.61 months (down from Feb) Median Price: $341,000 Days on Market: 49 Sold-to-List: 98.5% 📌 Fast-moving, high-demand market — sellers in control 🌄 Carefree Inventory: 13.18 months (holding high) Median Price: $475,000 Days on Market: 31 Sold-to-List: 98% 📌 High supply = strong buyer leverage and room for deals 🧠 Final Take Valley inventory is shrinking across the board. Prices are steady or rising, especially in Phoenix and Tempe. Sellers are rewarded when priced right. Carefree is the spot for buyers hunting bargains. 📈 Phoenix Rising (and Shifting): How Our Commercial Market Stacks Up Nationally The latest NAR Commercial Real Estate Insights Report just dropped, and Phoenix is making moves—some good, some challenging, but all full of opportunity. Here's the quick breakdown: 🏢 Office: Phoenix ranks in the Top 10 for highest vacancy (16.71%), up slightly from last year. That's tough—but also prime time for value buys and repositioning plays. 🏘️ Multifamily: Strong demand! We absorbed 19,523 units—a big jump from last year. Phoenix remains one of the strongest rental markets in the country. 🏭 Industrial: We're in the Top 10 again, absorbing 17.25M sq. ft.—up from 11.66M last year. Logistics and warehousing continue to fuel our growth. 🛍️ Retail: Nationally slowing, but Phoenix retail is evolving. Grocery-anchored centers and experiential retail are holding strong. 🏨 Hospitality: Back to pre-pandemic highs. Events, conferences, and year-round tourism keep Phoenix hotels busy. 📉 The Economy: Interest rates holding at 4.5%, inflation down to 2.8%, and the job market stays steady. 🚀 What's Next? Phoenix remains one of the most dynamic markets in the U.S. Want to find the best opportunities? Let's talk—whether you're investing, selling, or repositioning assets. 📎 Full NAR Report: Click here to view IN OTHER NEWS What a Recession Could Mean for the Housing Market. Real Estate vs. Stock Market: Which Is the Better Investment Right Now. The Devil Wears Prada' Loft Has Hit the Market for $9 Million. Homes are selling at the slowest pace in 6 years In March 2025, 51.2% of Phoenix home sellers offered concessions, while 15.5% of pending contracts fell out of escrow. - Redfin Why Americans love McMansions Copyright © 2025 Juan Pesqueira @ Attorneys Realty All rights reserved. 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