Condominium prices in the Phoenix market continue to climb upwards as supply dwindles, making it difficult for first-time buyers.

During the three-month period ending April 30, the median condo price increased 7.2 percent from the prior year to $200,000, according to a Polaris Pacific report.

At the same time, the volume of resales increased 2.5 percent to 1,936 transactions. The median price has rebounded from 2011 and is expected to appreciate further, said Mike Akerly, Polaris Pacific vice president and regional manager.

Downtown Phoenix had the highest median price, at $300,000 per unit, while central Phoenix had the lowest, at $154,800, according to Polaris Pacific.

Meanwhile, south Scottsdale, with 430 condos sold, and north Scottsdale, with 324 sales, experienced the most sales in May.

Akerly said the median price is up 9.5 percent year over year at a time when active listings are down 12.2 percent.

As interest rates and inflation begin to tick upward, affordability is becoming an issue for millennials who are thinking about buying, Akerly said.

"It's getting more expensive to borrow money, and the money we already have is worth less," he said.

The price increases he's seen are not sustainable, he said.

"No way are we going to see 5 percent, 10 percent increases across segments of the market moving forward," Akerly said. "We're starting to see that leveling off to a lower number. I can't predict, but I have a feeling it's going to be under the 5 percent range in coming quarters. Next year will be leveling even lower."

That bodes well for builders, who have 964 condominimums in the development pipeline in the Phoenix area, roughly valued at $500 million.

Of those, 379 are condos under construction and the remaining 585 are entitled, which means they have city approval to begin construction, Akerly said.

"The only way to make it easier for buyers is to see more supply," he said. We are seeing it to an extent, but nowhere near meeting the overall demand. The amount of housing being created is nowhere near matching the amount of new households being formed in Arizona."