Home Buying in Tempe>Question Details

Asuone, Other/Just Looking in Tempe, AZ

I may go to ASU to study for four years. I wonder if it is a good idea to buy a condo in a quite and safe neighborhood close to ASU campus.

Asked by Asuone, Tempe, AZ Wed Feb 24, 2010

Will it be easy to sell it after four years? Is it possible to get one under $100K with two beds. Thanks.

Help the community by answering this question:

Answers

12
Great Question! I have actually had at least one buyer a month this year that was looking to buy a condo or small home for their college student. They have found that they can purchase a condo for less than the college dorm cost. You can definately purchase a 2bedroom for under $100K. Make sure you consider how close you need to be to campus. WIll you have a car? do you need to be close to the bus? or to the light rail? or even walking distance? Condos around campus have been going FAST, Tempe/ASU is an area that is always very popular.....I cant see in my crystal ball if it would be easy to sell in 4 years -- but if I look at the past transactions I have had in that area over the last 6-7 years I would say yes! Let me know if I can help you find your place!
0 votes Thank Flag Link Fri Jul 16, 2010
The importance of buying a Condo is not acquiring it, it is about will there be financing for it when you want to sell it. Most realtors will recommend a single family home over a Condo to a buyer and right now is a good time to buy at lower prices in Tempe, AZ. Some experts are calling for another decline in market value but as Ted mentioned Tempe is land locked and next to ASU so there will always be demand for the home as a rental.
I have been advising my customers that are college age or have college aged kids to use the FHA Non-Occupying Co-Borrower loan (Kiddie Condo loan). I cannot quote interest rates because they change all the time so I will not. The one product that struck me just yesterday was the FHA 5/1 ARM, it is fixed for 5 years and then can adjust a maximum of 1% per year and only 5% over the life of the loan. So, whatever the starting rate may be the highest interest rate is 5% more than the start rate. The adjustment is based on the 1yr Treasury Constant Maturity Rate(CMT) price (currently 0.45%) plus a margin of 2.00%.
This is a great loan for a college student and a relative to purchase a home, rent some rooms, and to sell when the student graduates. You may also opt to keep the home for a rental.

For information on the history of the CMT here is a link: http://www.moneycafe.com/library/cmt.htm

Good Luck with your decision.
Web Reference: http://www.mattpuzz.com
0 votes Thank Flag Link Wed May 26, 2010
My opinion is this.. Look at what it will cost you to either rent or live on campus housing.. Compare that with the price, payment, convenience, luxury and location of buying a condo. Tempe is a great place to buy real estate as the values hardly go down and now that we've pretty much hit the bottom already, I would say go with the bulls and buy low now. In the long term you are not going to go wrong and if at worse you hold onto it after graduation and you rent it out as it will likely always have a tenant due to the university's limited housing.

The reality is that you are going to have to decide if you wan to be a homeowner or not. As stated below, make sure that the condo is FHA Approved and you can get the financing for it. Condo financing is a bit tight these days.
Web Reference: http://www.tedcanto.com
0 votes Thank Flag Link Mon May 17, 2010
Right now you can rent a reasonably nice all-utilities-included 2 bedroom apartment near ASU in Tempe for around 800$/month, or a cheaper efficiency for several hundred dollars less.

Any condo/townhouse in Tempe is going to work out to around or a bit above that in cost once you figure in HOA, maintenance, and mortgage (assuming a low down payment). With the local real estate market involved in a fairly unprecedented upheaval of foreclosure (-especially- in condo's/townhomes) it's hard for me to recommend buying right now given your short-term plans. Tempe's condo prices have been a bit stickier then they should be given the demographics and historical prices. Look at values pre-bubble on these condo's, compared with values today. You can draw your own conclusions (all real estate is -very- local), but I believe most of these units in Tempe are still 10-30% overpriced. If you do purchase one, try to shoot for pricing in line with what the unit would have sold for pre-2001-2002 (pre-bubble), and be very careful not to end up in a condo with a large number of oncoming or current foreclosures (that can shut down future FHA financing possibilities for potential buyers, and has serious negative repercussions on the property's value). Have your realtor do a bit of research to ensure you wont be surrounded by 45 people who bought in 2006-2008 and haven't made payments on their 100k underwater condo in 12 months. Also, condo's with very few occupied units have issues maintaining the property thanks to a lack of collected HOA fees.

If you intended to own the property a -good- long time it is probably a fine investment and costs should be close to equivalent rental prices (IE, you can ride out any shorter term fall in pricing comfortably). If you intend to sell in 4 years it's hard to recommend a condo/townhouse at the present time.

My recommendation if you -do- go this direction would be to look specifically at townhouses rather than condo's. There are quite a few stylish townhouses that fit your under 100k umbrella, and some that are actually bigger then you are asking for (3 bedrooms for instance). Take, for example, the townhouses on the east side of Mill Ave between southern ave and baseline. Stylish two-stories, situated in blocks of four townhouses with nice shared green lawns, reasonable pricing (one nice 3 bedroom recently showed up for 90k), 2 miles from ASU (easy to bike - use college ave) and it's on a direct bus route. They are rarely vacant (easy rentals) and have enough curb appeal to sell relatively quickly when they come up on market (assuming they are reasonably priced for the market, of course). These would make a great college pad, with room to grow if you decided to stay and start a family, and should be easily re-marketed down the road.

That's my two cents...
0 votes Thank Flag Link Mon May 17, 2010
Hello ASUone,
If you can purchase a patio home or townhome in the Tempe area. Make use of the first time buyers tax credit. Get a room mate to help you cover expenses. It is a no brainer. You will be at ASU for 4 or 5 years paying high rents to someone else. When you are finished you can rent to other students ( we have over 62,000 ASU students) or sell the home. Tempe is landlocked and like I said we have a huge student population that needs housing.. Don't be afraid . Check the Pepperwood Townhomes.

Best wishes
0 votes Thank Flag Link Thu Apr 8, 2010
Hi, I think you should rent instead of buying because you will not know how the resale market will be when you want to leave the area and resell or even put this condo into a rental program but there to will be fees attached. My advise, just rent and have fun or maybe have a school friend or two share a rewntal unit with you.
Lisa
0 votes Thank Flag Link Tue Mar 23, 2010
My vote is no for several reasons.

Condo communities have to be FHA approved and I am seeing a lot of communities that are not. This limits the pool of buyers.

Real estate is not liquid. It is relatively easy to buy but may be difficult to sell. If your plans change and you need to sell quickly then you may have to sell at such a low price it will cost you money.

Condo's typically have HOA fees and special assessments depending on the age and amenities. Since the special assessments can be an unknown it could negate any savings over renting.

Many first time home buyers do not realize all the costs involved with a home purchase. If you have an iPhone check out this application as it gives a good estimate of the costs for buying a home and what payments would be. Even if you don't have an iPhone the developer's website contains a lot of good information for the first time home buyer as well as links to other websites.
http://www.ibuyhome.me/Help/Introduction.html

Have fun at ASU.
Web Reference: http://www.sellaznow.com
0 votes Thank Flag Link Wed Feb 24, 2010
My suggestion would be no, do not buy based on the limited information you provided. Things happen, we know that, after 2 semesters you may leave ASU, pursue another college or a profession. Real Estate today should be looked at for a long term approach, and 4 years is not long term. There are too many acquisition costs and expenses plus you are tied to that property until you sell it. I say rent until you know when and where you are ready to settle down in a home for a longer period of time. Good luck!
Web Reference: http://www.zteamaz.com
0 votes Thank Flag Link Wed Feb 24, 2010
Dear ASU:

Hi. Good question. Many students do this. Prices hold up well within a mile or two of the campus. Some duplexes, triplexes and fourplexes are available also for consideration. The other renters could in essence make your mortgage payment for you. But, yes a condo at $100K would may be about the rent and you get the other deductions and tax advantages also. Shopping around for price and a fixer upper may net you an even better price.

Let me know if you have any other questions.


Regards, Jeff

Jeff Masich, Realtor
480-556-0940
JeffMasich@ArizonaHomesLand.com
Arizona Homes and Land
http://ArizonaHomesLand.com
HomeSmart Realty
0 votes Thank Flag Link Wed Feb 24, 2010
Asuone,

Even with a low down paymente, you will most probably pay less for a mortgage (PITI) than for rent. But there are many other varialbles involved. Also remember that there are expenses involved when you buy and when you sell that need to be taken into consideration too.

At this point it is very hard to predict where prices will be in 4 years, and if they are up (which hopefully they will), will that be enough to compensate for the buying and selling expenses? Even with the tax advantages, $8k credit, etc...?

Doing a very rough calculation, I will say that it will be worth it - but again that will be based on many assupmtions. You could have a big reward, but there is no doubt that there is risk involved.

And yes, you can find a decent 2 bedrooms for under $100k.

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart -
http://www.SmartAZRealty.com
0 votes Thank Flag Link Wed Feb 24, 2010
Hi ASU,

If you are planning to go to ASU it is a fantastic idea to purchase a home. The truth is that you should consider is the location - Tempe, AZ. This is a city that is land locked therefore the property values are steady and rising. It is actually sometimes difficult to purchase in Tempe. Another reason is the cost of campus housing which costs you just as much and the rental properties in that area are not cheap. As for the market, no one can predict but Tempe is a safer bet than any. In the worse case, you can keep it and rent it easily since it would be in Tempe.

As for the price, not sure. Best to speak to an agent that may specialize in the ASU area.

Good luck! If you have questions as to financing, let me know. Ask about the Kiddie Condo program.

Ted Canto
Web Reference: http://www.tedcanto.com
0 votes Thank Flag Link Wed Feb 24, 2010
The real question should be does it make more sense for me to rent or to buy. How do I honestly look at the numbers to find out? The blog below shows how to look at that decision.
http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…

The blog purposefully leaves out one aspect of buying a house; price changes. I know of no real way to know what prices will do. In much of the country prices are expected to drop in the next year. It may make sense to use certain assumptions deciding if it makes more sense to buy based on priced drooping or going up. But it can not really be part of the equation.

If you wanted to rent out the place after 4 years that would also change your calculations. The biggest problem with a condo is Home Owner Ass-ociation fees. You have to pay above and beyond the mortgage amount and then when you need a roof they charge you a special assessment for several thousand dollars. I would seriously ask about a small house instead.

Below is a house price prediction site for your (and others) state. It appears prices will drop this year. No one knows for sure what prices will do 4 years from now. They could go up, go down, or stay the same.
http://www.housingpredictor.com/arizona.html
0 votes Thank Flag Link Wed Feb 24, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer