Home Values Sink While Insurance Costs Rise in Arizona
By Terrence A. Thomas
May 2025
Overview: Statewide Momentum Slowing
Arizona’s housing market, once supercharged by the pandemic buying frenzy, is now experiencing a widespread deceleration — with Phoenix at the epicenter of what analysts call a significant correction. From a statewide perspective, the market has slowed, though the severity of the cooldown varies by county.
Between February 2020 and February 2025, home prices in Arizona grew 56%, compared to a national average of 45%, according to Zillow. But cracks are forming fast — particularly in Phoenix, where values are now down 7.4% from their June 2022 peak.
County-by-County Breakdown: 2025 Home Prices vs. Past Years
| County | 2022 | 2023 | 2024 | 2025 | YoY Change (2024–25) |
|---|---|---|---|---|---|
| Maricopa | $468,000 | $474,000 | $466,200 | $452,466 | -2.9% |
| Pima | $360,000 | $368,000 | $374,000 | $375,000 | +0.3% |
| Yavapai | $430,000 | $445,000 | $450,000 | $455,000 | +1.1% |
| Coconino | $510,000 | $525,000 | $530,000 | $530,771 | +0.1% |
| Pinal | $335,000 | $340,000 | $345,000 | $340,000 | -1.4% |
Sources: Zillow, Realtor.com, Reventure App estimates, and local MLS data.
Phoenix: Ground Zero for the Correction
A key insight from Nick Gerli, CEO of Reventure App, paints a stark picture:
“This market is trending down, and trending down fast… There’s a mass sell-off occurring, as pandemic investors and snowbirds sell out.”
- Home prices in Phoenix have declined 6.9% from their June 2022 peak.
- Inventory is ballooning: 18,701 homes for sale, the highest since 2017.
- Home sales in March 2025: 6,400 units, down 20% from historical norms and 35% from the pandemic peak.
- New listings up 20% year-over-year while buyer demand remains muted.
Gerli argues this mirrors the prelude to 2008. A house in Laveen, for example, that sold for $431,000 in 2022 is now in foreclosure and being auctioned for $289,500 — a 33% drop.
Comparing to the 2008–2009 Crash
| Year | Maricopa Median Price | Price Decline |
|---|---|---|
| 2008 (Peak) | ~$230,000 | |
| 2009 (Low) | ~$125,000 | -46% |
| 2025 | ~$452,466 | -7.4% from 2022 peak |
- The current downturn is far gentler — but the inventory dynamics and buyer fatigue are eerily similar.
- If overvaluation estimates (~18%) hold and inventory continues climbing, a 15–20% correction is “within the realm of possibility,” Gerli says.
Rising Homeowners Insurance: A New Financial Strain
While home prices are softening, homeowners insurance premiums in Arizona have surged, adding a new layer of financial pressure:
- Arizona experienced a 62.1% cumulative increase in home insurance rates from 2019 to 2024, the highest in the nation.
- From 2021 to 2024, Arizona homeowners saw a 48% increase in premiums, double the national average.
- In 2025, the average annual premium in Arizona is approximately $1,991, with Maricopa County residents often paying higher rates.
Factors contributing to these increases include:
- Inflation and rising construction costs.
- An uptick in natural disasters, such as wildfires and extreme weather events.
- Reinsurance market pressures, leading insurers to raise premiums.
These escalating insurance costs are particularly burdensome for homeowners in Maricopa County, where premiums have risen sharply, sometimes by more than $700 over a three-year span.
According to Silvio Soza, an independent insurance agent in Tempe, AZ “Inbound calls for home insurance has tripled for me this year. Luckily, I have been able to find insurers with comparable coverage at half the cost of the latest increases”.
Socioeconomic Impact: Buyers Welcome, Sellers Cautious
While sellers are struggling to match buyer expectations — often listing above what the market can bear — buyers, particularly younger ones, may benefit:
“A declining housing market is going to be bad for some people,” says Gerli, “but good for others — especially homebuyers who’ve been saving for the last five years.”
Local officials are warning of affordability crises for residents despite the price declines:
- Amy St. Peter of Maricopa Association of Governments: “Older adults are experiencing homelessness at a far greater rate… and that trend has been ongoing.”
- Greg Hague, CEO of 72Sold: “Properly priced homes are sitting unsold with very few showings.”
Conclusion: Arizona’s Market on a Knife’s Edge
The 2025 Arizona housing market reflects a post-pandemic rebalancing. Though not yet a crash, Phoenix’s situation demands close scrutiny — it could represent either a healthy correction or the start of a deeper unraveling.
With mortgage rates still hovering near 7%, buyer patience is increasing, while inventory pressures mount. If current trends hold, 2025 could become a key transitional year, one that echoes — but does not yet replicate — the devastating correction of 2008.
If you are looking to reduce your homeowners insurance, contact me immediately for a complimentary, no obligation quote.
