Featuring the perspectives of:

Kevin Gonzales
VP of Operations and Growth, The Noble Agency

Todd Sumney
Chief Industry Officer, HomeSmart International

Kristina Watson
Brokerage Manager, Berkshire Hathaway HomeServices Arizona Properties

Nicholas Yale
Founder/Designated Broker, Brokers Hub Realty

What do you expect for the overall housing market for 2025? Up, down, stable? Why?

Todd Sumney: While no one has a crystal ball, all of our market data is pointing to an increase in transactions, or an increase in the number of homes bought and sold next year — so we are cautiously optimistic it will be an “Up” year in that sense. Indicators also show demand still outweighing supply, which should keep home prices steady or increasing slightly, and most homeowners in Arizona are sitting on a large amount of equity in their homes after the price increases over the past few years. We did see a marked increase in transactions month-over-month and year-over-year in October, and if mortgage interest rates were to go down, we could see a quick increase in demand and transactions which could then drive home prices up.

Kevin Gonzales: Stable. Even though we are past the 2024 election cycle, which affected demand, interest rates are not rapidly improving, which will certainly affect lower price points and first-time homebuyers. Agents as well as the public need to adapt to the new NAR protocols, which will take some time for these policies to become the new normal.

Nicholas Yale: I feel that 2025 will be a mixed bag of nuts. We still have an inventory problem, we still have higher than anticipated rates, and the number one driver of people making large purchases is optimistic views of the future. Like it or not, politics does play a role in this, and with the new administration coming in January, that may give many people pause to see what those policies may do to the economy and/or the mood of the country. Luxury may fare better, as the wealthy tend to be more invested in stocks and enjoy bigger tax breaks and insulate them from a struggling economy. Entry-level and move-up buyers will more than likely be stable at best or decide to wait it out.

Kristina Watson: The Greater Phoenix housing market in 2025 is likely to remain stable with modest growth, driven by continued population and job growth in the region. Phoenix has been a migration hotspot, particularly for people moving from high-cost states seeking affordability and quality of life, which should keep demand steady.

However, the market’s trajectory will heavily depend on mortgage rates. If rates stabilize or decrease, buyer activity could rise, particularly among first-time homebuyers. Limited inventory may keep upward pressure on home prices, though affordability challenges might temper that growth.

On the supply side, new construction may increase but will likely be limited by labor and material costs. Sellers who are locked in lower interest rates may hesitate to list their homes, further tightening inventory.

Overall, Phoenix’s diverse economy and appeal as a relocation destination should sustain demand, even in a more balanced market.

What growth, if any, do you expect for your company next year?

Yale: The luxury market should do well if the economy continues on the streak it has been on for the last several years. I would anticipate the rental market to also do well as people may choose to rent and wait out rates/prices/politics.

Sumney: HomeSmart is continually investing in our technology systems that enable our real estate agents to provide the best service possible to consumers — which continues to drive our overall growth as the market leader. We have helped more homebuyers and sellers in Arizona than any other brokerage, as per the Phoenix Business Journal, since 2012, and we expect to continue to grow in our number of real estate agents.

Watson: In 2025, Berkshire Hathaway HomeServices Arizona Properties expects robust growth by leveraging its reputation for excellence and its comprehensive suite of services. With a strong focus on the luxury home segment, the company plans to further solidify its leadership in Arizona’s dynamic real estate market.

Key partnerships with Prosperity Home Mortgage and Agave Title will play a vital role in streamlining the client experience. These trusted allies provide seamless financing and title services, ensuring transactions are efficient and stress-free for clients.

Technological innovation will remain a priority, with advanced tools like AI-driven marketing, virtual tours, and digital transaction platforms enhancing both client engagement and agent efficiency. Attracting and retaining top talent will also be critical, with a continued focus on professional development and creating a supportive, collaborative environment.

As Arizona remains a magnet for new residents, thanks to its economic opportunities and lifestyle appeal, the company is well-positioned to capture growing demand. By aligning strategic priorities with market trends and leveraging its strong partnerships, Berkshire Hathaway HomeServices Arizona Properties anticipates another successful year of growth in 2025.

What will be the biggest challenges for agents in 2025 and how can they overcome those challenges?

Watson: In 2025, agents are likely to face challenges related to affordability, inventory shortages and evolving technology. High home prices and fluctuating interest rates will continue to strain buyer budgets, while limited inventory could hinder transactions and create intense competition. Staying informed on market trends and finding creative solutions, such as targeting underrepresented inventory segments or helping clients explore alternative financing options, will be essential.

Technology will also pose both opportunities and hurdles. Agents will need to keep up with advancements like AI-driven tools and new digital marketing platforms. Those who fail to adapt may struggle to stay competitive. Agents can overcome this by embracing ongoing education and leveraging technology to enhance efficiency and client experiences.

Additionally, shifting consumer preferences, including a greater focus on sustainability and remote work dynamics, may require agents to adjust strategies. Agents can succeed by anticipating these trends and tailoring their services to meet evolving client needs, such as highlighting energy-efficient properties or remote-work-friendly homes.

Building strong relationships and maintaining exceptional customer service will remain critical. By focusing on personalized solutions, staying adaptable, and committing to professional development, agents can overcome these challenges and thrive in 2025’s evolving market.

Gonzales: Navigating the “New Normal.” The changes that came with the NAR settlement means that agents need to develop a different talk track with their clients than what they have used for decades. They also are working in a higher interest rate environment than they have in recent years. To overcome these challenges, agents need to adapt their skill sets to compete in the current market. One word: growth. Growth through education so they can master the complexities of the change in the market.

Yale: I feel the biggest challenge for Realtors is the new policies of NAR and the implementation of them. No one way of ‘doing it’ has emerged yet, so with so many options and opinions, it confuses the public and put’s the burden on each agent to explain why their way is right. I do think that this will be the beginning of a sea change of professionals, as the weaker (read: non-productive) agents will exit the business, allowing others to rise higher in their careers.

Sumney: Two of the biggest challenges for agents (and their customers) in 2025 are tied together in a sense — available housing supply and affordability. As a country, we have not built enough new single family homes or starter homes for the past 10 years, which when coupled with higher mortgage rates in 2023 and 2024, has in turn caused housing affordability issues for many homebuyers. Agents can overcome these challenges by ingesting information and increasing their knowledge through education, mastermind collaboration sessions, one-on-one mentoring and industry data sources which are all abundantly available at HomeSmart to all agents on a daily and weekly basis. By using this knowledge, training and information to serve their clients, our agents can help their customers overcome these challenges to buy and sell no matter what market conditions we are all facing.

Which suburbs or Phoenix neighborhoods have the brightest housing outlook in 2025?

Gonzales: As we saw over the previous 24 months, the high-end luxury market will be the most resilient because those clients are less affected by interest rates.

Sumney: Almost every area of Phoenix is looking bright, with some having a brighter outlook than others. Several neighborhoods on the outer edges of Phoenix like Surprise, Goodyear, Litchfield Park, Anthem, North Phoenix and Queen Creek have new home offerings that are ideal for first-time homebuyers while also showing a large increase in employment opportunities, company relocations and increased transportation infrastructure, which is driving housing. Tempe has seen an increase in employment opportunities and city development, which is driving demand. And North Scottsdale all the way up to Cave Creek is still hot and showing no signs of cooling off.

Watson: Several Phoenix suburbs and neighborhoods are expected to experience robust housing market growth due to factors like economic development, population influx and infrastructure improvements. Notable areas include:

Gilbert: Known for its family-friendly environment and strong school systems, Gilbert continues to attract new residents. Ongoing commercial developments and a vibrant downtown area enhance its appeal, suggesting a positive housing outlook.

Chandler: With a thriving tech industry and proximity to major employers, Chandler remains a desirable location for professionals. Its diverse housing options and community amenities contribute to its strong market prospects.

Scottsdale: Renowned for luxury living, Scottsdale’s upscale neighborhoods and amenities make it a perennial favorite. Continued investment in tourism and business sectors supports its housing market stability.

Peoria: Experiencing growth due to new housing developments and recreational facilities. Peoria offers a balance of suburban living with access to urban amenities, making it attractive to families and retirees.

Mesa: As one of Arizona’s largest cities, Mesa benefits from educational institutions and cultural attractions. Its diverse economy and affordable housing options position it well for future growth.

These areas are poised for positive housing trends in 2025, driven by economic opportunities, quality of life, and ongoing development initiatives.

Check out this year’s other predictions below!