Tempe, Arizona Housing Market

How much can you negotiate in Tempe?

Only 18 out of every 100 homes for sale have found a buyer. The other 82 are still waiting. Your offer may be the only one on the table. About 1 in 2 sellers has already dropped their price. Each one has learned their first price was too high. Start below their new price, not their old one.

A typical Tempe home takes 60 days to find a buyer. Half of them take even longer. Those sellers are paying to own a house they want to sell. Search for homes listed 90+ days ago. There are 491 homes for sale in Tempe. That is the most in ten years. It is 7 times the low of Feb 2022. Every one of them competes with the house you want.

What to do about it

• Start in 85281, 85282, and 85283. Those are the three softest ZIP codes in Tempe.
• Filter for homes listed 90+ days ago that have already cut their price.
• Offer below the reduced price.
• Keep your inspection and financing contingencies.
• In 85281 only 8 out of 100 homes have a buyer. You can lose a few offers there and still win.

Is now a good time to buy in Tempe?

Asking prices are 18.7% below their Jul 2023 peak. You are not buying at the top. Prices are still falling. Waiting has paid off so far. Let listings age, then come back lower. Tempe prices have risen in 87 of the last 111 months. Drops here have been short and shallow. Buying in a slow month has rarely hurt a long hold.

There is no rush. Prices are still coming down. Watch the homes you like. Come back after they cut. Let the seller move first.

Who will rent from you in Tempe?

Most Tempe households rent. 57 out of every 100 households are renters. The renter share is shrinking. Five years ago it was 59 in 100. Tempe added about 1,500 renter households in five years. Renter households average 2.2 people. Two and three bedrooms fit the typical renter.

Households grew 7% in five years. The housing stock grew 6%. The two are moving in step. 9.2% of homes sit empty. That is normal for a healthy market.

The median Tempe household earns $82,295 a year. Incomes here have grown 6.5% a year since 2019. Incomes are rising faster than home prices. Affordability is improving. A typical home costs 5.7 times the median income. Most locals cannot buy. That keeps rental demand deep. It also caps the rent they can pay. A tenant on the median income can pay about $2,057 a month. That is the standard 30% affordability line. Rents above it thin your tenant pool fast.

That is the market, not your address. Run an address through the app to see its rent estimate and cash flow.

What numbers should you underwrite a Tempe deal with?

• Price growth to assume — +1.2%/yr. Tempe grew 5.8% a year over the decade. Ignore that rate. Most of it landed in the 2020 and 2021 boom. Without the boom, Tempe grows about 1.2% a year. That is the number to type in. Prices fell 3.0% over the last year. That is a timing signal, not a trend.
• Months of carrying cost — 3. A typical home takes 60 days to sell. Budget that long when you exit or refinance.
• Odds you cut your price to sell — 1 in 2. About 41% of homes on the Tempe market right now have already cut their asking price. Assume you are one of them when you sell. Do not underwrite an exit at your asking price.
• Comp on this, not median price — $308/sqft. The typical Tempe listing shrank from 1,976 to 1,507 sqft since Jul 2016. So median price hides real growth: 76% per sqft versus 40% on the median. Comp on median price and you will overpay for small homes.
• Competition when you exit — +51%. That is how much the number of homes for sale grew in a year. Your resale will face a bigger crowd than today's comps did.
• Price-to-income ratio — 5.7×. A typical home costs 5.7 times the median income. Most locals cannot buy. That keeps rental demand deep. It also caps the rent they can pay. Incomes are rising faster than home prices. Affordability is improving.
• Tenant rent ceiling — $2,057/mo. 30% of the median household income of $82,295. Rents above this line shrink your tenant pool fast.

Is Tempe a buyer's or seller's market in 2026?

Yes, if you negotiate. Buyers have the upper hand in Tempe right now. 18 out of every 100 homes for sale have a buyer, 41% of sellers have cut their price, and a typical home takes 60 days to sell.

Are Tempe home prices going up or down?

Asking prices are 18.7% below their Jul 2023 peak. You are not buying at the top. Prices are still falling. Waiting has paid off so far. Let listings age, then come back lower.

What price growth should I assume for Tempe?

Assume +1.2% a year. Tempe grew 5.8% a year over the decade. Ignore that rate. Most of it landed in the 2020 and 2021 boom. Without the boom, Tempe grows about 1.2% a year. That is the number to type in. Prices fell 3.0% over the last year. That is a timing signal, not a trend.

How fast are homes selling in Tempe?

A typical Tempe home takes 60 days to find a buyer. Half of them take even longer. Those sellers are paying to own a house they want to sell. Search for homes listed 90+ days ago.

Is Tempe a renters' market or an owners' market?

Most Tempe households rent. 57 out of every 100 households are renters. The renter share is shrinking. Five years ago it was 59 in 100. 9.2% of homes sit empty. That is normal for a healthy market.

What rent can Tempe tenants afford?

A tenant on the median income can pay about $2,057 a month. That is the standard 30% affordability line. Rents above it thin your tenant pool fast. The median Tempe household earns $82,295 a year.

Which Tempe ZIP code has the most negotiating room?

85281. Only 8 out of 100 homes there have a buyer. 45% of sellers there have cut their price, and a typical home takes 74 days to sell.