The Phoenix condo market is the slowest segment I work in right now, and I just lived it firsthand. Two days ago I closed a condo sale in north Scottsdale, and getting that deal from list to close took more pricing discipline, more buyer conversations, and more patience than any single family transaction I have handled this year. The unit was in great shape. The community was strong. None of that mattered as much as it would have in 2022, because the math around condos has changed, and buyers know it.

What the Phoenix Condo Market Numbers Actually Show

Let’s start with the data, because the headlines tend to either ignore condos entirely or lump them in with houses. According to Cromford Report data this spring, condo and townhome supply across Greater Phoenix is up about 11% year over year, while the median list price has slipped to roughly $339K, down around 4.2% from last year. Smaller units under 1,200 square feet are listing at a median near $265K, down more than 5% on the year.

The longer view is rougher. Condos under 1,100 square feet have given back nearly 17% from their June 2022 peak. Earlier this year, condos were posting one of the lowest sale success rates the Valley has seen in close to two decades. Contract activity has recovered a bit since the slow start to 2026, pulling slightly ahead of last year, but nobody who sells condos for a living would call this segment healthy. It is a buyer’s market inside a broader metro that, as AZ Big Media’s 2026 outlook notes, has otherwise been stabilizing.

The Apartment Glut Is Eating the Small Condo’s Lunch

Here is the part most condo sellers underestimate. Your competition is not just the resale unit down the hall. It is the brand new apartment complex two miles away offering eight weeks free rent.

Developers delivered roughly 21,000 new apartment units across the metro in 2025, pushing vacancy to around 12.5% in early 2026, with another 19,000 units still under construction. Rents have actually fallen for three straight years. Phoenix New Times covered the construction boom earlier this year, and the practical effect for our market is simple: the renter who used to stretch into a $265K starter condo can now lease a brand new one bedroom with a pool, a gym, and move-in incentives, and feel zero urgency to buy. Small condos compete head to head with that product, and right now the apartments are winning.

Where the Phoenix Condo Market Splits in Two

This is not one market. Larger condos and townhomes above 1,100 square feet have held up considerably better than the small stuff. A 1,400 square foot townhome with an attached garage in Las Sendas or Red Mountain Ranch is a fundamentally different product than a 750 square foot apartment-style unit near a freeway. The townhome buyer is usually a downsizer or a lock-and-leave snowbird who is not cross-shopping rentals at all.

Location and community quality matter more than ever too. Well-run associations with healthy reserves, reasonable dues, and good owner-occupancy ratios are still moving units. Communities with deferred maintenance, rising assessments, or heavy rental concentration are sitting. Buyers’ agents are reading HOA budgets now, and so am I.

Financing and HOA Details That Make or Break Condo Deals

Two practical things every condo buyer and seller in Arizona should understand. First, financing. Lenders treat condos differently than houses, and a community has to meet Fannie Mae’s condo project eligibility standards for conventional warrantable financing. FHA buyers can check whether a community is approved on HUD’s condominium lookup. A non-warrantable community shrinks your buyer pool overnight, and that shows up directly in price.

Second, disclosures. Arizona law requires associations to provide a resale disclosure package under A.R.S. § 33-1260, covering dues, assessments, insurance, and pending litigation. With association insurance and maintenance costs rising nationally, that packet is no longer a formality. I tell my buyers to read it like a home inspection, because a looming special assessment can erase whatever discount you negotiated on price.

The Honest Bottom Line

If you own a small condo and you do not need to sell, 2026 is probably not your year. The apartment supply wave is forecast to thin out as construction starts have pulled back sharply, and that should ease the pressure, but absorption takes time. If you do need to sell, price to the current market on day one, present the unit flawlessly, and have your HOA documents organized before the first showing. The sellers getting hurt are the ones pricing to 2022.

If you are a buyer or investor, this is the most leverage you have had in the Phoenix condo market in years. Larger townhomes in strong East Valley communities are trading at sensible numbers, sellers are negotiating, and you have time to do real due diligence. That combination did not exist three years ago. I just walked a condo deal through escrow in this exact environment, so if you want a straight read on a specific community, dues, financing, or value, reach out. You can also browse current East Valley listings on our site and check our latest market updates.

This article reflects the opinions and market interpretation of the author as of the publication date. Market data is drawn from sources believed reliable but is not guaranteed, may contain errors or omissions, and is subject to change without notice. Despite reasonable efforts at accuracy, this article may contain inaccuracies, and the author and Red Penny Realty, LLC assume no liability for any errors or for decisions made in reliance on this content. Nothing in this article is a guarantee of market performance or the value of any specific property.

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