For several years, real estate felt disconnected from its normal rhythm. Inventory was scarce. Competition was intense. Buyers made decisions quickly because they often had no choice. Sellers benefited from conditions that favored almost anything brought to market.

That period appears to be ending.

Across Phoenix, Scottsdale, and Los Cabos, I see markets settling into a healthier state. Buyers have more options. Sellers still hold considerable equity. Transactions require more thought. Negotiation has returned to the process. None of that signals weakness. It signals balance.

Many of the headlines focus on rising inventory, slower transaction volume, and longer marketing times. Those are facts. The more interesting question is what those facts mean.

From my perspective, they suggest a functioning market again.

In Arizona, one of the most significant developments has received surprisingly little attention outside of real estate circles. Recent ADU and casita legislation has meaningfully changed the economics of property ownership.

A property that once generated value from a single residence may now support additional income, multigenerational living, or future development flexibility. For some owners, the additional value may be substantial. The implications will vary by property and location, but the direction is clear. Land that was previously underutilized now has more ways to create value.

Phoenix and Scottsdale are also continuing to modernize portions of their zoning and permitting processes. Development rights matter. They always have. When regulations become more accommodating while desirable land remains limited, opportunities tend to emerge for owners, builders, and investors who recognize the change early.

The broader Phoenix market remains remarkably stable. Inventory has increased, and buyers have more choices than they have had in several years. Homes are taking longer to sell. Negotiation has returned. Yet distress remains rare.

That distinction deserves attention.

A growing inventory count often causes people to assume a correction is around the corner. The current environment looks different. Most homeowners still hold meaningful equity. Forced selling remains limited. The market appears to be adjusting rather than deteriorating.

North Scottsdale continues to stand out. Demand for exceptional properties remains healthy, driven by buyers who are often focused on lifestyle, tax considerations, business relocation, and long-term wealth preservation rather than short-term financing conditions. Buyers may be more selective than they were a few years ago, but selectivity and weakness are not the same thing.

Los Cabos tells a similar story through a different lens.

I lived and invested there for nearly two decades. During that time, I watched the region move through multiple cycles. Tourism, hospitality, retail, and real estate have never moved in a straight line. Strong periods have been followed by quieter periods, and quieter periods have often created the foundation for the next phase of growth.

The current market feels familiar.

Activity has slowed from the pace many became accustomed to over the last several years. Buyers are spending more time evaluating opportunities. Some projects that depended heavily on momentum or speculation are finding the environment more challenging than before.

At the same time, well-positioned properties continue to attract interest.

Quality still matters. Location still matters. Execution still matters.

In many respects, the most interesting opportunities appear when markets stop rewarding everything equally. That is when fundamentals begin separating strong assets from average ones.

The luxury segment continues to demonstrate that pattern. Communities such as Chileno Bay, Maravilla, Palmilla, Montage, El Dorado, and Costa Palmas benefit from characteristics that are difficult to reproduce. Scarcity remains scarcity. Exceptional locations remain exceptional locations.

Capital has not left Los Cabos. Investors have simply become more selective about where they place it.

Evidence of that selectivity can be found at the highest end of the market. This spring, a residence in Querencia came to market at $54 million, placing it among the most expensive listings ever offered in Los Cabos. According to listing broker Blake Harrington, sales above $15 million and $20 million have become increasingly common in the region, reflecting how much the luxury segment has evolved over the last decade. The point is not that every property commands those numbers. It is that exceptional assets continue attracting exceptional buyers. 

If there is a common thread running through all three markets, it is this: conditions have become more favorable for people willing to think beyond the next quarter.

Buyers have room to negotiate.

Sellers who understand pricing and presentation continue to achieve strong results.

Investors can evaluate opportunities based on fundamentals rather than urgency.

Those are healthy conditions.

One lesson I have learned over the years is that opportunities rarely announce themselves. They seldom arrive when confidence is high, and everyone agrees on what happens next. More often, they appear when sentiment is mixed, expectations are uncertain, and patience becomes an advantage.

This market feels a little like that.

Whether you are considering a primary residence, a second home, a development project, or a long-term investment, understanding the cycle is usually more valuable than reacting to the headlines.

Derrick Grahn

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