Condos in the Tempe area have generally followed the overall housing trend for the last few years. As with all housing, condos significantly appreciated in value from 2003 - 2005, and leveled off over 2006. There appears to be particularly good demand for condos in the downtown Tempe area, primarily due to the impact of ASU and business development activities. ASU housing demand will continue to put pressure on affordable student housing availabilitiy. Finding quality, reasonably priced student condos are becoming more difficult to find. I think a purchase now will be a good long term investment.
We are in a buyers market, so there is some downward pricing pressure. Days on market for condos to sell have extended from an average 38 last year to about 60 this year for condos sold in the $150,000 - $160,000 price range (some longer depending on condition of the unit). It's difficult to predict how this will change over the next couple of years. The general perception is that housing prices will stablize by year end, with moderate increases going foward (returning to more normal rates). It is a good time for buyers to negotiate on purchase price. I would recommend that you find a condo as close as possible to ASU in your price range. Ideally, it would be in good condition, or that you invest in updating as needed particularly when it comes time to sell.
Keep in mind that you can also rent out extra bedrooms to other students to help offset condo expenses. The ASU Web Devil on line directory is a good site to advertise for student renters, and to get an idea of current rental rates.
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