Arizona MLS Market Report

Arizona Foreclosure & Distressed Home Market

A 10-Year Review: 2016–2026

MLS-listed distressed home sales in Arizona have begun climbing again after reaching historically low levels — but the numbers are still far below where they were a decade ago.

Arizona Distressed Home Market at a Glance

Are Foreclosures Increasing in Arizona?

Yes, MLS-listed distressed home sales are increasing from the extremely low levels seen several years ago. However, the data does not show Arizona returning to the distressed-sale levels recorded a decade ago.

1. Arizona's 10-Year Distressed Home Sales Trend

The long-term numbers tell an interesting story.

Closed distressed sales declined every year from 3,773 sales in 2016 to only 302 sales in 2022. That represents a decline of approximately 92%.

Then the direction changed.

*2026 data through September 16, 2026.

Distressed closings increased to 341 in 2023, 364 in 2024, 615 in 2025 and 818 through September 16, 2026.

The 2026 total has already exceeded the entire 2025 total by approximately 33%. But perspective matters: distressed sales are still roughly 78% below 2016 levels.

2. Distressed Home Prices Have Recently Softened

The median sold price within the distressed segment increased substantially during the past decade, rising from approximately $165,000 in 2016 to around $330,000 in 2024 and 2025.

In 2026, however, we are seeing some softness.

Through September 16, the 2026 median distressed sale price was approximately $305,500.

For a cleaner year-over-year comparison, January through August shows:

That's a decline of approximately 7.1%.

But this does not necessarily mean the same distressed home lost 7.1% of its value. The mix of properties sold changes based on location, condition, size, occupancy and property type.

Median price tells us what sold during a particular period. It is not the same thing as measuring the appreciation or depreciation of an individual home.

3. Price Per Square Foot Also Moved Lower

Median price per square foot provides another indication that the distressed segment softened during 2026.

That's a decline of approximately 4.3%.

Because both median price and median price per square foot moved lower, there is evidence of recent price softness within the properties that actually closed in the distressed segment.

A property-specific market analysis is still necessary before applying these broader trends to an individual home.

4. January–August 2025 vs. 2026

Comparing the same eight-month period gives us one of the clearest pictures of what is changing.

The number that stands out is closed sales. Distressed closings increased from 359 to 768, a year-over-year increase of approximately 114%.

At the same time, median days on market barely changed — moving from 77 to 79 days.

Distressed homes are changing hands more frequently, but that doesn't mean they're automatically selling quickly.

Facing a Difficult Situation With Your Home?

If you're behind on payments, considering selling, or simply want to understand what your home may be worth and what your options might look like, I'm happy to talk through the numbers with you.

5. Distressed Homes Are Taking Longer to Sell

During the unusually strong housing market of 2021 and 2022, the median cumulative days on market for distressed properties fell to roughly 22 days.

By 2025 and 2026, that number had climbed to approximately 78–79 days.

Longer marketing times can create opportunities for buyers, particularly when a home:

• Needs repairs or updating
• Is vacant
• Has already received price reductions
• Has limited financing options
• Requires lender or third-party approval

Cash also continues to play an important role. Cash represented approximately 34.8% of January–August 2026 distressed closings, compared with 29.8% during the same period in 2025.

6. What This Means for Arizona Homeowners Facing Foreclosure

One of the most important things I want homeowners to understand is that being behind on mortgage payments does not necessarily mean foreclosure is the only option.

Equity Matters

A homeowner may be behind on payments but still have enough equity to sell the property, pay off the mortgage and selling expenses, and potentially preserve some of their equity.

Time Matters

Once a trustee-sale timeline is underway, waiting can reduce the available options. Deadlines should always be verified directly with the trustee, lender, housing counselor or a qualified attorney.

Pricing Matters

With distressed homes taking longer to sell, starting with an unrealistic asking price can consume valuable time.

A Cash Offer Isn't Automatically the Best Offer

The highest advertised price isn't always the most important number.

The homeowner should also consider estimated net proceeds, certainty of closing, inspection terms, closing timeline, repair requirements and the buyer's ability to complete the transaction.

7. What This Means for Buyers and Real Estate Investors

More distressed properties can create opportunities for buyers and investors, but distressed does not automatically mean bargain.

The property itself should determine whether the opportunity makes sense.

Buyers should consider:

• Purchase price
• Estimated repair costs
• Property condition
• Financing limitations
• Title issues
• Occupancy
• Potential resale value
• Neighborhood demand

Condition can vary dramatically. Some properties may only need cosmetic updating, while others may have significant roofing, HVAC, plumbing, electrical, structural or other issues.

Financing can also be a factor. Some properties may not meet FHA, VA or conventional property-condition requirements, making cash or renovation financing necessary.

The opportunity isn't simply finding a home labeled "distressed." It's identifying a property where the price, repairs, risk and long-term plan make sense together.

8. Arizona Foreclosure Market Outlook

Based on this MLS dataset, distressed activity has clearly become more visible compared with the exceptionally low levels of 2022–2024.

However, this dataset by itself does not establish a major foreclosure wave.

The stronger conclusion is much simpler:

Going forward, some of the numbers worth monitoring include:

• New notices of trustee sale
• Completed trustee sales
• MLS distressed listings and closings
• Mortgage delinquencies
• Active housing inventory
• Months of supply
• Price reductions
• Days on market
• Mortgage rates
• Unemployment

Together, these indicators can provide a better picture of whether the increase in distressed activity is continuing, stabilizing or accelerating.

Have a Question About a Distressed Property?

Whether you're thinking about selling a home before foreclosure, looking for a distressed-property opportunity, or simply want to understand what the numbers mean for your situation, feel free to reach out.

David A. Baker – eXp Realty
English & Spanish

Methodology & Important Limitations

Source: Residential MLS export covering the full multi-county MLS area analyzed for this report. The dataset contained 13,533 unique listing numbers, including 12,615 records with both a close date and sold price.

Reporting period: January 1, 2016 through September 16, 2026. Full-year totals are used for 2016–2025. The 2026 figure is year-to-date. January–August comparisons are used when comparing complete equivalent periods for 2025 and 2026.

Important limitation: This report analyzes the pre-filtered distressed-property population contained in the supplied MLS export. It should not be interpreted as a count of every foreclosure, notice of trustee sale, courthouse auction, lender repossession or other foreclosure event in Arizona.

This information is provided for general informational purposes and is not legal, tax, foreclosure-prevention, appraisal or lending advice. Market trends do not determine the value or outcome of an individual property. Homeowners with legal, tax, lending or foreclosure questions should consult the appropriate qualified professional.

David A. Baker – eXp Realty
Call or text: 602-373-6345
Email: david@beinphoenix.com
English & Spanish