Though Tempe condo prices are reaching the lowest levels seen in years and some experts say it's currently a buyer's market, many ASU students say they aren't going to buy.
In February, Tempe condo resale prices sunk to $159,000, the lowest median price in more than two years. The number of units sold this past year is significantly lower than the year prior.
Lower mortgage rates have made homes more attractive to investors looking to buy them — and there are plenty of properties on the market to consider, said Lee McPheters, associate dean of W. P. Carey Executive and Professional Programs and director of the JPMorgan Chase Economic Outlook Center.
"Right now we are in a buyer's market for housing," McPheters said in an e-mail. "If somebody finds a place they like in a good location, there will be plenty of opportunity to negotiate for a good deal."
With the first two months of the year behind us, March should be a good indicator of what's going to happen in the Maricopa County housing market for the remainder of the year, said Jay Butler, associate professor and director of realty studies in the Morrison School of Management and Agribusiness at ASU's Polytechnic campus.
But it isn't really a buyer's market now because buyers have to first be able to sell properties they currently own, Butler said.
"Right now, everyone is going to wait and see what these projects do before they continue to build," he said. "The predominant reason is the credit problem that was built during the 2004 to 2006 period of time."
Condo sales have been well below last years levels as well — 40 sales last month, from 50 a year ago — and more condos coming online is further glutting the market.
Marketing freshman Michael Banovac, a realtor in the area, said investing and building high-rise condominiums in the sluggish Tempe market is foolish.
"There is no market for it right now," Banovac said. "I think the developers are delusional. People don't have the cash flow for these over-priced places."
A few recently built condos, including Northshore Condominiums on Rural Road and Hayden Ferry Lakeside on Rio Salado Parkway, are priced between $450,000 and $3 million.
A representative at Hayden Ferry Lakeside said families are already moving into the condos.
Accounting freshman R.C. Thornton added that it's interesting that developers are building these high-priced homes in a middle-of-the-road town like Tempe.
"I think it's fine if they can pull it off," Thornton said. "More power to them."
But Thornton and Banovac both said they don't plan to move into any of the high-rise condos after they complete their freshman year.
Butler said the high price of the condos would be difficult to finance for parents who might want to invest in property for their children who are students at the University.
"They may look for the used market more than the new market," Butler said. "It's a cheaper bet, rather than a safer bet."
Reach the reporter at: ryan.calhoun@asu.edu.
