Market Conditions in Tempe>Question Details

Annie G, Home Seller in Tempe, AZ

My brother and I have inherited a home in Tempe. I want to rent it and he wants to sell

Asked by Annie G, Tempe, AZ Sun Nov 15, 2009

He and the lawyer for the estate think the market will continue to slide. I think Tempe will recover.
What do you think?

Help the community by answering this question:

Answers

7
Annie,

There are a few different ways that your question could be answered and that would depend on where the home is located and what year it was built. I price homes for a few investors and there are some areas in Tempe where I get excited and tell them to buy "sight unseen". There are other areas that from even the most optimistic view, a bottom cannot be identified. Oddly, most homes in Tempe per the general plan adopted in 2003 shows that a majority of homes built after the Tempe housing boom decade of the 70's are investment properties by majority.

Recently, I had a couple sitting on a home in a neighborhood that is pretty stable, historically. Then, in June of this year, many surrounding homeowners decided to throw in the towel and lose their homes. Fortunately, the tax records and public records made us aware of the impeding drop in prices and they were able to sell quickly.

With so many things up in the air regarding unemployment and the economy, I like the other responses from agents that seem to be pointing you in a direction to take a more detailed, specific look not only at the properyt from a sale/rental perspective but also wanting you to provide details regarding what's really important to you.

Good luck with your decision. I hope you and your brother work it out to both of your satisfaction. Also, on a side note, if you want believe the market is at a bottom and he thinks that it will continue to slide, consider a buyout arrangement. I use these to help people that are getting divorced come to a fair and equitable solution when they have different objectives on how to handle the marital property. You and your brother could employ the same strategy.
Web Reference: http://www.monopolyman.com
0 votes Thank Flag Link Sun Nov 15, 2009
Annie,

There are many factors that play into your question. It really depends on where your home is located in Tempe. Size, Value, and condition.

If the home is close to ASU, light rail, mill ave, or in Tempe lakes I would hold on and rent it.

Do you need the money, how will this effect everyone's taxes?

Will the market continue to slide? most Probably. Again location is a key factor to what degree of depreciation you can expect.

You have to take into consideration that there is a very large "shadow market" of foreclosed homes, which the bank owns, that have yet to be listed.

Another consideration would be what is the home worth now? If it is in the 90K to 175K affordability range you may want to hold on, and rent even though rental prices are sliding.

If the home is valued over 300K? where there are a lot less buyers, than your Brother & Lawyer may be correct.

Of course no one can accurately predict real estate prices in the future.

Good Luck
Patrick
480-543-9899
Web Reference: http://www.AZRE.TV
0 votes Thank Flag Link Sun Nov 15, 2009
Mr.P, Other/Just Looking in Arizona
MVP'08
Annie,

I am with you. There are many indications that we have reached, or passed, the bottom and prices in general in the Phoenix area are showing signs of improvements. I have many articles I can forward to you, so you can present them to your brother and lawyer.

It is a great time to buy, not the best time to sell. Although being a landlord also has its risks and complications, and you need to be ready to deal with those. Even if you hire a property manager.

The bottom line is that nobody can really predict what is going to happen in the future, but there are tools we can use make the best informed decision possible.

Good luck and let me know if you want me to fwd you some articles.

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker/Realtor, HomeSmart -
http://www.SmartAZRealty.com
0 votes Thank Flag Link Sun Nov 15, 2009
Annie:
Before I can give you an accurate answer to your question I would need to see the house to determine what it would take to make it rent ready and the potential rent. If the house needs a lot of work it may not be worth making the out of pocket cash investment of several thousand dollars just to get $800 or $1000 monthly rent. It is a buyer's market for tenants as there are so many houses available so they are extremely picky. The first time home buyers credit, low interest rates and drop in home prices has allowed tenants with good credit to buy further shrinking the tenant pool. I would never rent a property just to have a write off. The key on any investment is have positive cash flow, i.e. more money coming in every month than going out for expenses. There are other things to consider like finding a good management company, putting the property into the proper legal entity to protect your other assets and finding good tenants just to name a few. My company currently manages over 40 properties in Tempe so we are experienced in the Tempe rental market and we have an aggressive marketing plan.

From a sales perspective home values in the Tempe area have stabilized according to the industry experts. I don't think we will see a big increase in prices until the economy improves and the number of short sales and bank owned properties available decrease. Today there are 1,057 homes available for sale in Tempe and 451 or either short sales or bank owned which is almost 50%.

Again the question is what is the condition? If it needs more than cosmetic repairs like carpet and paint it may be better to sell as is and let the buyer make the repairs of their choice. Depending on what is owed on the house you may not get back the money for repairs after the costs to sell. I have fixed up over 20 houses so have a good idea of what most repairs will cost.

I would be happy to meet with you at the house to review the condition, determine what repairs would be needed and give you a free market analysis for both rent and sale.

Cheers,
Web Reference: http://www.sellaznow.com
0 votes Thank Flag Link Sun Nov 15, 2009
Dear Annie:

Good question.

I think the Tempe market will continue to improve month by month and year by year from here on. The bottom has already been reached. Homes sales and prices have rebounded (not strongly mind you) but they are on the way up.

May be 2-8 years before the much of the losses in the past two years are recovered. Tempe as a college town has an advantage over other metro cities, with a large group of university and supporting businesses because Tempe has employees and students thatn want close in residences. Plus, the light rail connection makes it an easy work commute into Phoenix for employment, sports, arts, ASU central and other related activities.

Since I cannot comment on your personal needs, cannot recommend what you should do. For me? I would rent it out and sell when the re-sale market goes up. Once the number of foreclosure homes drops lower, and it will, the resale house prices will go up. They always have and they will in the future, if you are patient.

Hope this helps.

If I can ever assist you or your friends and family with your real estate needs, please feel free to contact me...Regards, Jeff

Jeff Masich, Realtor®
Arizona Homes and Land
http://ArizonaHomesLand.com
480-556-0940
jmasich@usa.com
HomeSmart Real Estate
Web Reference: http://ArizonaHomesLand.com
0 votes Thank Flag Link Sun Nov 15, 2009
Hello Annie,

You would need to evaluate the two possibilities. Do you want to get a monthly cash flow and that is assuming the home inherited is free and clear? Do you want an investment that can mean a write off and possibly earn some appreciation down the road?
Or do you just want to sell and get as much as possible at this time in this current market?
I own and run both a sales department and also a property management company here in the east valley and could help get you information so you can evaluate and decide for yourself what is best for you and your brother.
The market continues to show sgns of life and only the next year will tell on what will happen to values - at this time they have stopped sliding and are holding their own but no one has a crystal ball.

If you need a market analysis or a rental analysis - please feel free to visit us at http://www.valleywidepropertymanagement.com or visit my website at http://www.cecilduarte.com for a market analysis and both at your cost to you.

Good luck
Web Reference: http://www.cecilduarte.com
0 votes Thank Flag Link Sun Nov 15, 2009
It is a choice you need to make, which apparently you guys cant decide on. Renting it is riskier, you may or may not reap the benefits, selling it now will give you todays money in your pocket that you can invest elsewhere if you like.
Web Reference: http://www.TeamKearney.com
0 votes Thank Flag Link Sun Nov 15, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer