Real Estate Trends in Tempe, Arizona Explained

Many home buyers– especially first-timers– get confused about the difference between the real estate trends they see on the news and what they find in their target city. And that's because local markets can be very different from the national average! Even neighborhoods within the same city can have significant price and build differences!

So working with a local, experienced realtor is critical to truly understanding the real estate atmosphere of your target area. And lucky for you, I'm the perfect example of a local, qualified realtor for Tempe, Arizona!

In this blog post, I'll share my insight as a Tempe resident for the last ten years, plus my professional insight as a licensed realtor (including some non-public stats!).

Trends in Available Residence Styles and Age

Before we get into price points and trends in real estate value, let's talk about the types of homes currently available in Tempe and development plans. 

First, most single-family homes in Tempe were built around the 1980s.

This "older home" average is because Tempe is landlocked and undeveloped land ran out around this time. A few neighborhoods have pockets of homes built in the early 2000s, but these homes are rare overall. 

However, this doesn't mean that single-family homes in Tempe are all outdated. Many have renovated their homes or even demolished the original structure to build a new home. One thing to note is that most homeowners focus on cosmetic renovations– meaning very few have updated the home's systems.

So while a home may look newer, buyers should be aware of old electric work, plumbing, HVAC, or roofing.

Tempe also includes many styles of homes, blending older architecture with newer styles.

For example, you can expect a wide range of single-family home styles, including transitional ranch style, mid century modern, and tract home lots. The apartment buildings tend to be newer, so you’ll mostly find modern or contemporary styles there. 

You may be drawn to one of Tempe’s five nationally registered historic districts, including the Date Palm Manor Historic District, Borden Homes Historic District, Roosevelt Addition Historic District, University Park Historic District, and Tomlinson Estates Historic District. 

Most of these neighborhoods reflect development trends that began in the post-war period from 1945 to 1960 and are protected from renovations that would change their historic presence. You’ll find homes built in many charming styles like the Craftsman  Bungalow, Spanish Colonial Ranch, French Provincial Ranch, and other international styles.

Recent Trends in Tempe Prices

The last 12 months have worried some that we're experiencing a real estate bubble popping or even a crash– but that is not true. Instead, what is happening is a normal and predictable correction from massive housing demand by over-optimistic and excited home buyers and investors. 

And while the market has slowed a bit due to rising interest rates, the housing demand is still higher than available inventory. 

Tempe remains a popular real estate destination, so we expect the market to continue to see rising prices in both home listings and rent amounts, although at a slower pace.

Prices have shifted significantly in the last three years, so let’s review year-over-year highlights to give you a picture of the Tempe scene:

• The 2020 Median Sales Price (MSP) of $332,000 ending in an 11.2% price increase into 2021.

• The 2021 MSP of $408,250 ending in an 18.4% price increase into 2022.

• The 2022 MSP of $470,000 ending in a 21.4% price increase into 2023.

Now of course I can’t predict the future, but I can tell you that 2024 is expected to be a market correction year– meaning that many predict a decrease from the market peak we’ve seen build over the last three years.

Current Prices in Popular Tempe Areas

Here's a simplified overview of Tempe price trends by zipcode (reflecting the first quarter of 2023), giving you a closer look at neighborhood trends than the previous section. 

85281: North Tempe

North Tempe includes the downtown area and is close to Arizona State University (ASU). Popular neighborhoods include Maple Ash, University Park, and Holdeman. This area is currently undergoing a lot of urban development, with new builds exclusively including multi-family residences like apartment buildings and condos.

Median Sold Price: $402,200

Price Range: $200k - $1.06m

Closed Sales: 47

85282: Brentwood-Cavalier

Still, close to downtown and ASU, the Brentwood-Cavalier area has been busier than the 85281 zone. Well-known neighborhoods include Cyprus Southwest, Meyer Park, and Broadmor. Expect to see a lot of condos in this region, including many affordable options for first-time home buyers. 

Median Sold Price: $412,500

Price Range: $226k - $710k

Closed Sales: 108

85283: Central Tempe

Central Tempe includes a wide range of single-family home types. You'll notice a wide price range, from starter home fixer-uppers to waterfront homes. Some popular neighborhoods include Optimist Park, Dava Lakeshore, and Tempe Royal Estates.  Remember that most Tempe homes were built in the 1980s, so renovated homes may include old electrical, plumbing, or HVAC.

Median Sold Price: $440,000

Price Range: $225k - $1.06m

Closed Sales: 81

85284: South Tempe

The most southern neighborhood of Tempe includes the highest density of luxury properties. I have to mention some of the gems in this area, including Tally Ho Farms, Sunburst Farms, and Alta Mira. You can expect to find larger ranch-style homes, half-acre lots, and quiet neighborhoods surrounded by all the amenities you’ll need!

Median Sold Price: $632,500

Price Range: $388k - $2.1m

Closed Sales: 38

Projections for Tempe Real Estate

The most recent data (July 2024) for Tempe home prices lists the median home price at $430,000. This is a lower median price compared to last year at the peak of the market high. However, the steady growth and home value appreciation over the last several years show Tempe real estate projections to continue upwards. 

With a strong, expanding economic footprint, diverse population, and the anchor provided by ASU, I predict Tempe will flourish into a bustling city center with highly desirable residential neighborhoods. Only time will tell!

Ready to Move to Tempe?

I love living in Tempe! I've lived in Arizona my whole life, and Tempe has been a wonderful city. So let a local pro show you around and find the best fit for you in Tempe, AZ!

Send me an email today at Realtor@StephanieHernandez.com