In Metro Phoenix, Concessions Are Standard Below $1 Million While Luxury Sets Records

National headlines have labeled Phoenix “the price cut capital” of the country, but the reality on the ground is more fragmented than that label suggests. Depending on the city, the zip code, and the price, sellers in Maricopa and Pinal counties are living in entirely different markets – some still competitive, others flooded with inventory and concessions that have become nearly automatic.

Soroosh Ghafaripanah, a partner at AZ Dream Homes and founder of 1% Listing, a discount listing brokerage operating across both counties, describes a market that has split along a price line somewhere around $1 million to $2 million. Below that threshold, inventory is up, buyer leverage is growing, and sellers who arrived with 2021 expectations are getting corrected fast. Above it – and especially in the $5 million-plus range – “they’re setting new records every other day,” he says.

Where Inventory Is Reshaping the Conversation

Inventory across the Phoenix metro is up roughly 50%, according to Ghafaripanah. That shift has changed the tone of listing appointments. Two years ago, sellers still carried what he calls the 2021 and 2022 “feeling in their bones” – a confidence that they could test higher prices and find a willing buyer. That confidence has eroded.

“There’s no testing the market,” he says of the current environment. “There’s no ‘let’s try to set a higher value’ at certain price points.”

The firm now turns down more listings than it takes. Some sellers still price based on Zillow estimates or outdated comparable sales. In response, the brokerage has narrowed its comparable window to the last 30 days for properties under $1 million – a departure from the more typical 90- to 180-day lookback. “Unless it’s a very unique property, we’re looking at what sold in the last 30 days, what’s pending, what’s active,” Ghafaripanah says.

When a seller insists on a higher number and lists with another agent, the firm tracks the property. The pattern, he says, is consistent: after three to six months, the price lands roughly where his team originally recommended – after months of carrying costs and showing fatigue.

The Geography of Leverage

The “price cut capital” framing flattens a market that varies sharply by location. Ghafaripanah points to four cities – Paradise Valley, Scottsdale, Chandler, and Cave Creek – that remain seller’s markets as of September. Fountain Hills falls in the same category. Another group of roughly seven areas sits in balance. The outer ring – Buckeye, Apache Junction, Maricopa – has tipped firmly into buyer’s market territory.

Pinal County faces an additional layer of pressure. National builders like Pulte and D.R. Horton are still active in communities around Queen Creek and San Tan Valley, offering subsidized mortgage rates as low as 4.5% compared to prevailing rates near 7.5%. Resale sellers in adjacent subdivisions are competing directly against that financing advantage, though turnkey homes with pools and finished landscaping can still move if priced correctly. Ghafaripanah says his firm sold one in the area last week that went under contract within two weeks – but only because the pricing was not aggressive.

Concessions Have Become Standard Below $1 Million

The concession dynamic in the sub-$1 million segment has become nearly unavoidable. Ghafaripanah estimates that roughly 90% of transactions below that threshold now involve a buyer request for concessions, typically 2% to 3% of the purchase price. Below $600,000, the requests are nearly universal.

To evaluate whether a concession request reflects genuine financial need or negotiating posture, the firm calls the buyer’s lender directly. Most confirm the buyer needs the funds. The occasional lender who declines to discuss it effectively signals the opposite.

On buyer agent compensation, the post-settlement landscape has played out simply. Of the 76 homes the firm closed in the past 12 months, every buyer’s agent except one requested 3%. Sellers typically negotiate that down to around 2.5%. Three sellers last year tried to push buyer agent compensation below 2.5%, and all three deals collapsed. In one case, the buyer’s agent responded that if the seller wouldn’t pay a standard commission, the buyer expected the seller to be unreasonable during inspection. “That seller learned the lesson,” Ghafaripanah says.

The Psychology of Rate Adjustment

The rate environment remains the market’s central friction point, but Ghafaripanah frames it as more psychological than structural. At 7.5% on a conventional 30-year fixed mortgage, today’s rates are historically average. The problem is that millions of homeowners locked in rates between 2.75% and 3.25% during 2020 and 2021, creating a perception gap between what rates feel like and what they actually represent.

The lock-in effect keeps existing homeowners in place longer and makes the math on a move-up purchase punishing. A buyer trading a 3.25% mortgage for a 7.5% one ends up buying less home for the same or more money. That reality suppresses both listing volume and buyer confidence at the same time.

Seller psychology also splits along generational lines. Homeowners who lived through the 2008 crash are starting to feel uneasy. “They might start getting a little bit nervous, feeling like this is 2006,” Ghafaripanah says. Younger buyers in their late twenties and early thirties carry their parents’ experience of that period, which colors their own decision-making.

Ghafaripanah does not think a 2008-style correction is coming. He notes that in March, rates briefly touched 5.9% and the market was moving well – suggesting that even modest rate relief could unlock activity. His expectation is that the current rate environment will gradually feel normal to both buyers and sellers. “Even if everything stays the same as it is today, I think it’ll kind of normalize, and I think more sellers will kind of wrap their heads around it and maybe they’ll start selling – and then the cycle starts again.”

For sellers in the Phoenix metro weighing whether to list now or wait, the deciding factor is less about where rates go and more about which side of the market’s price line their home falls on, and whether they are willing to price to the conditions that side dictates.

About the Expert: Soroosh Ghafaripanah is a partner at AZ Dream Homes and founder of 1% Listing, a discount listing brokerage covering Maricopa and Pinal counties in Arizona.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.