F
or those looking to buy or sell a home in 2025, experts say preparation is crucial as the real estate market gears up for an active year. The National Association of Realtors predicts a 9% increase in existing home sales, with a 13% rise expected in 2026. Phoenix's unique opportunities make it a prime location for buyers and sellers alike.

    "The Phoenix market is poised for exciting opportunities," said Trevor Halpern, founder/CEO of Halpern Residential at eXp Realty. "With inventory levels balancing out and interest rates potentially stabilizing, buyers and sellers will find themselves in a more dynamic environment."

    As the national election's immediate aftermath subsides, experts expect the stagnant market to start moving. Stabilized stock and bond markets could lead to lower mortgage interest rates, creating opportunities for more people to enter the market. A 1% drop in mortgage rates can add nearly 1 million buyers nationwide who can afford a home.

    Phoenix continues to attract new residents due to its robust economy and desirable lifestyle. The city's growth story is unparalleled, with thousands of new residents flocking to the area each year. This influx keeps demand high, making it a great time for sellers to capitalize on their investments and for buyers to secure a home in one of the most promising markets.

    Home prices are expected to rise nationally, ranging from 0.5% to 4.4%, depending on the region. Phoenix will see steady price growth driven by strong demand and limited supply. However, local market conditions may lead to stabilized or slightly declining prices in areas where affordability is a challenge.

    The Valley's housing demand remains high, with newcomers driving prices up and competition for available homes increasing. Halpern expects Phoenix to remain a relatively balanced market despite price increases. Inventory challenges are common across the country, and any substantial drop in interest rates could ignite a surge in buyer activity, outpacing available supply and potentially generating a seller's market.

    Buyers must be prepared to act quickly, especially if rates decline substantially. Sellers should capitalize on limited inventory to maximize their sale prices. Halpern advises buyers to know what they want and can afford, while sellers should work with trusted professionals to navigate the competitive environment.

    A trend fueled by millennials is the interest in smaller, more sustainable homes. Rising construction costs and affordability pressures are driving this shift, with many buyers prioritizing functionality and sustainability over square footage. Compact homes that maximize utility without sacrificing style are expected to dominate new construction projects in 2025.

    Halpern expects a resurgence in luxury real estate, which often slows during election years. Phoenix's affordability advantage will likely fuel interest in 2025, making it an attractive location for high-net-worth individuals. For first-time homebuyers, creative financing solutions are becoming increasingly popular to help them enter the competitive market.

    Interest rates will be the biggest determinant of the 2025 real estate market. If rates decline substantially, competition among buyers is expected to heat up, and sellers will be in a favorable position. Doing your homework, being prepared, and working with trusted professionals is key to making the most of what the year has to offer.