Despite a tough national climate for real estate, northern Tempe has benefited from having an ASU campus in the neighborhood and light rail in the pipeline and is holding its place as one of the strongest rental markets in the Valley.
The North Tempe submarket is one of the most high-demand and profitable real-estate areas in the Phoenix metropolitan area, according to an expert.
Pete TeKampe, a real-estate broker who sits on the board of directors for the Arizona Multihousing Association, recently analyzed renting rates and vacancy statistics from around the Valley.
While the average rates for renting are increasing around the Valley, they’re slowing down with a declining real-estate market, said TeKampe, who graduated from ASU in 1992.
“Rents are still growing, but the rate at which they’ve been growing has decelerated,” TeKampe said.
Out of 30 submarkets from around the Valley, North Tempe had the second-highest rate of rent growth from the second quarter of 2007 to 2008, ranking behind the Peoria/Sun City area, TeKampe said.
In North Tempe during the second quarter of 2008, the average cost of monthly rent was $868 for all communities containing at least 50 units.
The North Tempe submarket encompasses property north of the U.S. 60, including the Tempe campus.
Rents in the Phoenix area averaged about $777 in the second quarter of 2008 ¬— the most recent numbers available — compared with $768 in 2007, TeKampe said.
Demand for real estate in Tempe will probably mean that rents will continue to rise at a faster pace than in the rest of the Valley, he said.
The University and light-rail construction have contributed to the strong growth in rates and the high demand for apartments and condominiums, TeKampe said.
In addition, Tempe’s location is good for its rental market, he said.
“Tempe is essentially the geographic center of the Valley,” he said. “Tempe is more or less a city being seen as the place to be.
Journalism senior Maddy Burke said the location of her condominium near Apache Boulevard and McClintock Drive is ideal for her commute to campus.
“I think it’s very convenient,” Burke said. “I’ve lived here for a while, and the fact that it’s so close to campus has really helped.”
Computer-science graduate student Vikram Neelakandan, who lives near Apache Boulevard and Rural Road, said he likes the location of his apartment.
Neelakandan said Tempe has many job opportunities in his field, and his location is good for attending school and working.
Valleywide, 68 percent of apartment landlords have offered concessions such as free utilities or cable for renters, TeKampe said. But in North Tempe, only 58 percent have done so — a sign of the relative health of the submarket.
TeKampe said that a year from now, renters will likely be paying more.
Nevertheless, renting in the current real-estate climate can help students get more bang for their buck, TeKampe said.
“This is a great time to be a renter,” he said.
