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Warm greetings. In this week’s Arizona real estate brief, we navigate a rapidly evolving market landscape shaped by legislative shifts, softened demand, and strategic repositioning opportunities. Active listings in Maricopa County are up 24.1% year-over-year, while new contract activity has dipped 11.6%, nudging Phoenix into more buyer-favorable terrain. Meanwhile, Arizona House Bill 2110, set to reshape single-family neighborhoods by legalizing accessory dwelling units (ADUs), signals a legislative nod toward long-term density and adaptive wealth-building.
From a wealth management perspective, increased inventory and ADU flexibility enhance options for yield-focused strategies and multigenerational estate structuring. On the tax front, slower appreciation and modest ADU valuation lifts create nuanced planning windows. While no sweeping new regulations are dampening supply, water-related permitting delays in Pinal County and rising vacancy in Phoenix office sectors underscore entitlement and use-risk considerations. Smart-city priorities are gaining traction through rezoning activity and the integration of LEED-certified multifamily developments. Altogether, these dynamics reward forward-looking portfolio reviews and selective reallocation.
As of June 2025, the ARMLS Market Watch reports that active residential listings in Maricopa County have increased 24.1% year-over-year, reaching 17,785 homes. Meanwhile, new contract activity has declined by 11.6% over the same period, signaling demand-side hesitation. The Cromford Market Index has dropped below 110 for Phoenix proper, indicating a gradual shift toward a buyer-favorable balance. From a wealth management lens, this softening may ease entry for cash-heavy buyers looking for longer-term rental yield or multigenerational holds. On the tax side, flatter appreciation could dampen future assessed value hikes. No new legislation is directly constraining inventory, though permitting cycles remain sluggish in outer submarkets. Lower buyer urgency stabilizes values for those with low leverage, and increased inventory supports more efficient smart-city land use over time.
Source: ARMLS STAT, Cromford Report
Arizona House Bill 2110, effective September 2024, requires cities to allow accessory dwelling units (ADUs) on most single-family lots statewide, overriding restrictive municipal codes. Scottsdale, Paradise Valley, and Tempe are currently revising local ordinances in response. This reform enhances future-proof use flexibility for high-value parcels, particularly in aging neighborhoods with strong utility infrastructure. Wealth portfolios benefit from potential multi-generational income layering, while property tax assessments may modestly increase as secondary units add value. Legislatively, it reflects the broader state drive to ease housing constraints. Environmentally, gentle infill reduces sprawl and car dependence.
Source: AZ Legislature Tracker – HB2110
The Arizona Department of Water Resources (ADWR) released its latest depth-to-water dashboard and groundwater model update in June 2025 for Pinal AMA. Several proposed developments in Casa Grande and Maricopa have been delayed due to insufficient “assured water supply” certifications. This regulatory constraint critically influences land valuations and entitlement timelines in affected areas. Wealth managers must weigh the risk of stranded capital in water-insecure corridors. These ADWR rulings align with long-term sustainability mandates and may prompt more adaptive reuse and higher-density rezoning. Tax structures are not directly altered, but timelines for valuation realization may stretch.
Source: ADWR Groundwater Modeling
CoStar and Yardi Matrix data for Q2 2025 show metro Phoenix office vacancy at 19.8%, with submarkets like Midtown and Biltmore exceeding 23%. Negative net absorption is driven by downsizing tech and finance tenants. Capital preservation strategies are increasingly pivoting toward conversion to residential or flex space, especially within Opportunity Zones. Tax benefits tied to Qualified Opportunity Funds (QOFs) remain in play for such repositionings. No legislation mandates conversion, but Phoenix Planning and Development has fast-tracked several use-change cases. Strategically, adaptive reuse of underutilized office space supports urban resilience and aligns with smart-growth imperatives.
Source: Yardi Matrix, CoStar
According to Zillow and Redfin data, rental price growth in Chandler, Gilbert, and Mesa has plateaued at 0.2% quarter-over-quarter, with Gilbert showing a slight -0.5% dip. Year-over-year rental appreciation is now below CPI for the first time since 2020. Over 6,500 new multifamily units were delivered in the East Valley during the past 12 months, causing a temporary imbalance. From a financial structuring view, investors relying on aggressive rent growth assumptions may face cap rate pressure. While property tax assessments lag market softness, landlords may challenge valuations in 2026. Legislative factors are neutral, but sustainability gains are evident in newer LEED-certified builds easing long-term maintenance risks.
Source: Zillow Research, Redfin Data Center
The U.S. Census Building Permits Survey (April 2025) reports that Buckeye issued 836 new single-family permits YTD, while Queen Creek approved 672—each exceeding Scottsdale and Tempe combined. This marks a 14% year-over-year increase in west and southeast corridor permits, despite cooling in central submarkets. Tax policy implications include delayed revenue realization due to lagging buildout and occupancy. However, from a strategic family office perspective, lower land costs and amenity buildout potential offer long-run upside. Local zoning remains suburban in form, but Queen Creek and Buckeye are exploring mixed-use overlays. These expansion nodes will require enhanced water, transit, and tech infrastructure to maintain resilience.
Source: Census Permits, Maricopa Permit Portal
The Bureau of Labor Statistics reports the Phoenix-Mesa Consumer Price Index rose 3.4% annually through May 2025, down from 6.2% in mid-2023. However, shelter costs, which make up over 30% of the index, increased 5.1% year-over-year—outpacing national averages. This divergence pressures renters, limits purchasing power, and influences real estate investment timelines. For portfolios with inflation-hedged strategies, housing-linked instruments remain advantageous. Property tax structures lag CPI but may be indirectly affected by income-sensitive owner appeals. Legislators are monitoring cost-of-living inputs for state housing aid. Future-proof valuation depends on navigating inflation trends, particularly as energy and insurance components decelerate.
Source: BLS Phoenix CPI
Across Arizona, cities are fast-tracking cutting-edge infrastructure—from AI-powered windows at Phoenix Sky Harbor to digital equity hubs in underserved Phoenix
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Thank you for joining me for this week’s market intelligence snapshot. As Arizona’s housing landscape adjusts under new legislative, economic, and demographic pressures, we remain committed to distilling clarity from complexity. If you found this brief valuable, we invite you to share it with trusted peers, follow us for refined insights on emerging market inflections, and consider scheduling a private Zoom strategy session to explore tailored positioning options for your real estate portfolio.
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You can listen to all AZique real estate news and insights on Spotify or any other preferred platform of yours: YouTube, Amazon, Audible, Apple Podcast. Daily Arizona real estate market pulse – straight from Sonoran Desert to you where ever you are!
Always fresh, smart, data-driven from Sonoran Desert straight to your mailbox
Click here to explore current mortgage rates. Rates may vary based on credit score, loan type, and lender policies. For the most accurate estimate, consult with a lender.
Nice to meet you! I’m Katrina Golikova, and I believe you landed here for a reason. I help my clients to reach their real estate goals through thriving creative solutions and love to share my knowledge—giving lots of freebies along the way.
See You Soon,
Katrina
Scottsdale, AZ
