Buying a small house in Tempe!

Asked by Ismail, Tempe, AZ Sat Nov 15, 2008

I'm single and will be attending school at ASU for 4 years and want to find out if I should consider buying a new small house in Tempe instead of renting. How much will it cost me? Is it cost effective?

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9
Tempedude, , Tempe, AZ
Tue Nov 25, 2008
hmmm. all the agents say buy, what a surprise!

But lets look at the facts: foreclosures are up, job losses are up, prices are dropping. Do you expect them to stop dropping any time soon? why would they? people who are losing their jobs going to buy? No. foreclosures that have to be sold into this terrible market are going to trounce prices all next year.
wait a year, see how much cheaper they are then.

by the way, I am a financial professional. If I made a forward looking statement about a stock, like 'values will be up in 4 years' I could be sued. why do realtors get away with it?
1 vote
Tempedude, , Tempe, AZ
Fri Dec 26, 2008
JM:

I believe in the following link, you will find a good discussion of how to evaluate a market:

http://www.zillow.com/advice-thread/Discussions/Buying/US/46…

The problem with trying to say "WHEN" a market will bottom, is that basically, the speed of the decline is subject to unobservable phenomena. If the government makes foreclosures require a 2 year delay, well, the bottom gets pushed back 2 years. If suddenly, everybody got a 100k tax credit to buy a home, well, obviously the market would do an about face instantly!

So, since it is impossible to guess what changes to current market conditions will come due to governmental meddling, any prediction based on today's characteristics if fallable. However, outside any of these changes, the current observables can be used to estimate what will happen next.

best of luck on your move!
0 votes
Jules M, , Arlington County, VA
Fri Dec 26, 2008
(This is actually more of a question for the one who calls himself "Tempedude")

Mr. Tempedude,

While I think you could show more respect to some of the other posters on this board – they have, after all, treated you with respect in most cases -- you do make some very salient points about the housing market in the valley.

I do not doubt your claim of making money in the market when it was good. I am sure a Berkeley educated market-savvy guy would have to be a sound econometrician to teach at ASU’s WP Carey b-school.

Rather than focusing on the past mistakes, obvious negatives and nonsensical nature of the marketing hot air… I would be interested in your thoughts and analysis on when, how (and “if”) you think the market will come back. You seem to distain predictions related to timeframes and I share your annoyances with these but I would ask that you indulge this reader with your own SWAG on when the sun will once again shine on this market.

Thanks in Advance,
Jules M
0 votes
Tempedude, , Tempe, AZ
Fri Dec 19, 2008
prices dropped 7% over the last 4 weeks in tempe!!! but hey they deleted the only person predicting that they would go down!
0 votes
Frances Flynn…, , State College, PA
Tue Nov 25, 2008
Ismail, please accept our apologies for a temporary departure from an otherwise informative discussion thread ... we have removed a post that did not meet a standard set by our Community Guidelines ... there are some insights in this thread that are wise to consider.

I give you a great deal of credit for weighing your purchase options in a time of economic uncertainty ... I applaud your level headed thinking ... there are excellent opportunities for people who look at all of their options to make a thoughtful, educated decision about purchasing a home. There are some great agents sharing their thoughts here. I thank them for their participation.

We will have an increasingly valuable source of resources as we continue to share information that is on topic ...

Frances Flynn Thorsen
Community Manager
Trulia.com
Web Reference: http://www.trulia.com/guidelines/
0 votes
Lucinda Tkach, , Phoenix, AZ
Sun Nov 16, 2008
Ismail,

There are some awesome prices on homes right now. Many of my buyers are finding there mortgage will be less than if they rented.

I went to the auction today and there were some awesome values! You can still find values like it in the market place.

If you have any more questions I can provide details.
0 votes
, ,
Sat Nov 15, 2008
Hello Ismail,

Congratulations on your decision attending ASU!

There are a lot of things to consider whether you should buy or rent while attending school in Tempe. Property values have declined sharply and depending on your circumstances and intentions it very well could be that a real estate investment may pay off for you in the long run.

Generally I would advise against buying a property if you have no intention of keeping the property for longer than 4years, you don't want to become a landlord/real estate investor or if there is no one else in your family who can take advantage of the property.

There is an older article on MSNBC pointing out the pros and cons of investing in student housing:

http://www.msnbc.msn.com/id/14041818/

Granted the market was way different when this article was written however it still may point out things you may haven't considered yet.

Feel free to contact me if you like to chat...

Christoph Schweiger
Associate Broker
HomeSmart
0 votes
Stew Keene, Agent, Scottsdale, AZ
Sat Nov 15, 2008
Ismail,

I would buy, and here's why.

You have a tax write off for the interest you will be paying.

If this is your first home purchase you have a $7,500 tax credit.

If you buy a home with at least two bedrooms you could rent out one bedroom lowering your payment.

You would certainly speculate some appreciative value by the end of 4 years.

You could keep the home as a rental to see more appreciative gain in equity over time.

These are just a few reasons.

If you want to work with an expert that can find you the home and do the financing as well I can certainly help.

Until you speak to a lender you won't know what you qualify for.

I can send you a link to search for homes in Tempe.

Just let me know.

Respectfully,


Stew Keene
Ph (480) 220-7491
Fax (866- 711 8573
StewKeene@yahoo.com
Keller Williams - Scottsdale, AZ
2008-2009 Master of Real Estate award recipient
ABR, GRI, ePro, CNE, MRE, AHWD
0 votes
Paul Welden, Agent, Scottsdale, AZ
Sat Nov 15, 2008
Hi Ismail,

The cheapest house for sale in Tempe is listed for $99,900. There are other choices, such as condos, town homes & patio homes, that start at $48,900, but a traditional single family detached home is a very good option for Tempe. It is a good idea to buy a home especially in Tempe and if you know that you'll be here for at least 4 years, and think if the tax benefits that you'll get! On the other hand, if you were only going to be here for 2 years, I would advise you to rent.

I invite you to contact me for more detailed information and assistance.

---
PAUL WELDEN
Buyer's Agent REALTOR
HomeSmart
Web Reference:  http://CheapPhoenixHomes.com
0 votes
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