Phoenix Housing Inventory Is Falling — and the Market Is Tighter Than It Looks

If you’ve been hearing that the Phoenix housing market is “slowing,” the latest MLS numbers tell a more nuanced story.  Yes, inventory has come down — but what really matters is where that inventory exists and what kind of homes are actually available.

In this video, I break down Jan 2026 housing numbers.

Phoenix MLS Inventory Has Dropped Meaningfully

At its recent peak, the Phoenix metro area was carrying roughly 26,000–27,000 active listings in the MLS.

Today, that number sits closer to 23,000 listings.

That’s a reduction of 3,000–4,000 homes, or roughly a 12–15% decline in total inventory.

On the surface, that may not sound dramatic — but total inventory numbers can be misleading.

Why “Total Listings” Don’t Tell the Whole Story

Not all listings are created equal.

When buyers say, “There’s plenty to choose from,” what they usually mean is:

• Plenty of homes that don’t fit their needs

• Plenty of overpriced homes

• Plenty of properties outside their target area

• Plenty of homes that need major updates

Once you narrow the criteria to what most buyers actually want, the market tightens fast.

The Reality for One of Phoenix’s Most In-Demand Buyer Segments

Let’s look at a very common buyer profile:

Single-family homes that are:

• 3 bedrooms, 2 bathrooms

• Built 2013 or newer

• Located inside the Loop 101 / Loop 202 freeway system

• Priced under $600,000

Across the entire MLS…

👉 There are only ~140 homes that meet all of those criteria.

That’s not a typo.

What This Means for Buyers

If you’re shopping in this segment:

• You’re not competing against 23,000 homes

• You’re competing against a few dozen realistic options

• Well-priced homes still receive multiple offers

• Hesitation often means missing the house

This is why buyers can feel frustrated even when headlines say “inventory is up” or “the market is cooling.”

For desirable, move-in-ready homes, the market remains highly competitive.

What This Means for Sellers

If you own a home that fits this profile:

• You are in a scarcity category

• Your home is competing against a very small pool of listings

• Pricing correctly matters more than ever

• Homes that show well and are positioned right still sell quickly

This is not a market where sellers can ignore strategy — but it is a market where strong homes stand out sharply.

The Big Takeaway

The Phoenix housing market hasn’t simply “softened.”

It has segmented.

• Total inventory is down

• Desirable inventory is extremely tight

• Broad market stats hide hyper-competitive submarkets

If you’re making decisions based only on headline numbers, you’re missing what’s actually happening on the ground.