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The year 2022 is coming to a close and most feel the Arizona real estate market had a tough year. But is that true?

According to Zillow, the typical property value in Arizona increased by 17.7% from August 2021 to August 2022. But since then, home values in Arizona have declined between 2.2% to 8.2% depending on the zip code.

In most cities, home values ended the year on the decline, but only after a prior gigantic increase. As a matter of fact, home values in AZ have risen by 54.2% over the past two years and by a whopping 93.2% over the past five years!

The decline is smaller than the mainstream media may lead you to believe. It is not a steep “crash” that people thought was going to happen, and the decline is minuscule when compared to the recent gains.

But what is to come in 2023? Will the declines continue? Is another housing crash upon us?


The real estate market in Arizona has historically been fairly stable with relatively low levels of volatility compared to other markets. However, like any real estate market, it can be affected by a variety of factors including economic conditions, population growth, and changes in interest rates.

  • Economic conditions: A strong economy can lead to increased demand for housing and higher home prices, while a weaker economy can lead to lower demand and lower prices.
  • Population growth: As more people move to Arizona, there is increased demand for housing, which can drive up prices.
  • Interest rates: When interest rates are low, it can be more affordable for people to buy homes, which can increase demand and drive up prices. Conversely, when interest rates are high, it can be more difficult for people to afford homes, which can decrease demand and lead to lower prices.
  • Housing supply: The amount of homes on the market can have an impact on home values. If there is a shortage of housing in a particular area, it can lead to higher prices if it is out of balance with demand. Conversely, if there is an excess of housing, it can lead to lower prices if out of balance with demand.


Although Arizona has boasted a large job growth and recent thriving economy, the state is currently the nation’s leader in inflation at 12.1%. Because the dollar does not currently go as far in AZ, it could have a negative impact on housing.


In 2022, the state experienced strong population growth which has helped propel demand for housing and drive up home prices. This chart below shows that Arizona is a top five state for population growth in 2022 with an increase of over 94,000 people.

Will population growth continue? All indications are yes, as Arizona is a popular state due to its growing job opportunities and favorable climate. The state is home to a number of major industries, including tourism, healthcare, and technology, which contribute to its strong job market. Additionally, Arizona’s warm, dry climate makes it a popular destination which can drive up demand for properties.


As seen by the chart below, interest rates doubled from the 3’s to the 6’s. This means that what people are able to qualify for has decreased. If interest rates do not come down, it will put pressure on home values.


The balance between supply and demand is important when looking at home values. Believe it or not, the chart below created in the middle of December by Cromfort Associates LLC shows that most cities have an increase in this balance. This typically indicates increasing home values.

All of this is coming in the middle of a holiday season. Most anticipate supply to have a change after the holiday season ends when people are more willing to list homes for sale.

It is important to note that the real estate market can vary significantly from one region to another within Arizona, as different areas can be affected by different economic and demographic factors. 


Based on the data outlined above, it looks as if home values will decrease a little in 2023. This sentiment has been shared by entities like Fannie Mae, Goldman Sachs, Morgan Stanley, Redfin, Zillow, and more. Each of these companies are estimating an Arizona housing market decline between 0.5% and 10%. If that seems like a wide range, it is. Why? Because it is all a guess. Anyone who attempts to tell you they know exactly where the housing market is headed in 2023 is lying or ignorant.

If you are worried about the market decline, don’t. You can’t control it. Worrying about it won’t help anything. When you look at home values in context – things are great!

If home values decreased by the 10% being estimated, we would still be way above the increases we experienced since 2020. And, even if the home value decrease is doubled from the 10% estimate to 20%, we would yet again be well above the home value increases of recent years.

Home values did end the year in a downward trend. But not nearly as steep of a decline as you may think.

Home values will likely experience a decline in 2023 but two of the four factors that impact home values are in good standing! The decline will likely not be as bad as some would lead you to believe.

If you are a homeowner interested in selling your home in 2023 but concerned about values, schedule an appointment with one of our Real Estate Advisors below. We would love to give you a realistic picture of what your home value is and what may be an optimal time to put it on the market.

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