When it comes to buying luxury homes in Arizona, people tend to think of locations such as Phoenix, Tucson, Mesa, Chandler, and Gilbert. And while these five do have a strong luxury market, several smaller cities in the state also have thriving luxury real estate markets of their own.
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One such city is Tempe. Here, we’ll explore why Tempe could be your next home or why you’d want to invest in luxury housing in this city. We’ll look at the current and predicted real estate market as well as delve deeper into the luxury properties available in Tempe. We’ll also take a broader view of the city and what factors make it a compelling investment location.
Welcome to Tempe, AZ
Before we deep dive into its housing market, let’s get to know Tempe a little more. Tempe, as we know it today, can be traced back to Charles Trumbull Hayden, a businessman from the east coast, who in 1871, started a ferry crossing and a mill on the Salt River, which attracted farmers and other settlers to the area. This settlement would eventually grow into a full community, with pioneer Darrell Duppa eventually suggesting in 1879 that it be named Tempe comparing the community’s location in the Salt River valley to that of the Vale of Tempe near Mount Olympus in Greece.
In the late 19th century, Tempe experienced rapid growth and development thanks to the arrival of the railroad and the establishment of what would later become Arizona State University. This growth would continue throughout the 20th century, with the city seeing the construction of new housing and commercial developments in the area during that period.
Because of its location in the Sonoran Desert, Tempe receives plenty of sunshine throughout the year, making it a haven for outdoor enthusiasts. Beyond the bustling urban center, Tempe offers plenty of opportunities for outdoor adventures. Tempe Town Lake, for instance, is a popular spot for boating, paddleboarding, and kayaking. The lake, a man-made reservoir created by damming the Salt River, is surrounded by a picturesque park, making it perfect for strolls or picnics with friends and family.
Given the large student population in the city, Tempe has an energetic vibe to it, with the city overflowing with an eclectic mix of shops, restaurants, bars, and entertainment venues. The city is home to cultural landmarks such as the renowned Tempe Center for the Arts, where visitors can enjoy a diverse range of performances, exhibitions, and shows, as well as the Arizona Heritage Center which offers a fascinating glimpse into the state’s rich history.
In short, Tempe is a wonderful place to live, with much to offer its residents.
The Tempe, AZ real estate market
Like much of the country, Tempe saw rocketing house prices from 2020 all the way up to mid-2022. At the height of the housing frenzy that reached its peak in mid-2022, the median price of a home sold in Tempe was $525,000. Almost 2 years earlier in July 2020, that figure stood at $349,000. In a little under 2 years the median sold price of a home in Tempe had risen over 40%.
However, the introduction of higher interest rates by the Federal Bank helped cool, what many believed was a rapidly overheating market. This had the effect of correcting the real estate market in Tempe, returning it to being a more sustainable and attractive market for homebuyers.
While the correction did see prices fall, the months of April, May, and June of 2023 have seen a continuous upward trend. In April the median sold price was $420,000, in May it was $458,000, and in June the figure had risen to $475,000. This indicates that Tempe is very much a sought-after location and is a sellers market.
At present, a significant part of Tempe’s housing stock is made up of luxury homes. These range in price from $1.2 million for a two-story ranch-style home to well over $3 million for a resort-style luxury residence. These residences can be found in Tempe’s most exclusive gated neighborhoods, including Circle G Ranches, Corona Vista, and Wingfoot.
The luxury real estate market throughout 2023
According to a recent Forbes report, luxury properties remain stable and resilient when compared to the rest of the housing market, with the report noting that properties in this tier are less susceptible to the affordability and interest rate concerns that tend to impact many housing markets. Examples of this are the states of Arizona, Massachusetts, and Utah, recording their highest-ever priced residential transactions in 2022—a trend that is expected to continue well into 2023.
Aside from continued stability and resilience in terms of pricing and sales, experts see several other trends affecting the luxury real estate market in 2023. These include the following:
- Inventories will continue to shrink. A notable side effect of the increase in demand from buyers is a dwindling supply of available homes. As per a recent report, while there were significant improvements in luxury housing stocks in 2022, the current demand for homes means that improving the overall inventory remains a high priority for developers, especially if they want to sustain the market’s momentum.
- Expect more buyers to pay in cash. Given the increase in interest rates over the last few months, sellers can expect buyers to go for cash deals instead of more traditional financing routes. In fact, according to data collected by the NAR, all-cash sales comprised 26% of transactions in November 2022—an increase of 2% from the figures reported just a year earlier.
Given the rapid recovery of the real estate market in Tempe after the correction of 2022 and the continuous strength of the luxury real estate market in general, now could be a very opportune time to invest in Tempe. Luxury homes in Phoenix look likely to rise and yet are still generally at a lower price or at least at a similar value now than they were just a year before. Buying later should still prove a solid investment, but buying sooner may enable the strongest levels of appreciation in a short period of time since the boom of recent years.
Types of luxury homes for sale in Tempe, AZ
Tempe, AZ offers a wide range of properties for luxury homebuyers, with the current inventory having everything to suit every taste and lifestyle preference.
Private estates, with their high ceilings, open floor plans, hardwood floors, professional-level kitchens, and opulent spa-style bathrooms, are seen in many luxury properties in Tempe, Arizona. These family-oriented homes typically sit on expansive lots and feature outdoor amenities like swimming pools, al fresco dining areas, and gardens—all ideal for hosting friends and other family members. In addition, some homes of this scale also come with detached pool houses which can be converted into guesthouses or ADUs.
Tempe also has many condominiums in addition to single-family homes. These homes, which primarily but not exclusively cater to young professionals, offer quick access to the city center and have features like updated kitchens and bathrooms with top-of-the-line appliances and fixtures as well as numerous, roomy bedrooms. Not only that, but these properties also come with community amenities such as EV charging ports, in-house gyms, pools, and concierge services. Another benefit is that they often offer fantastic views of both the valley and the city skyline.
Upscale townhouses are another type of home found in Tempe’s high-end real estate market. These homes, which can be found in both urban and suburban areas, are distinguished by amenities like multiple bedrooms and bathrooms, as well as multi-car garages.
The most common architectural styles in Tempe, AZ
One of Arizona’s most sought-after locations, Tempe—and the rest of the Phoenix metropolitan area—features an intriguing tapestry of architectural styles. Here are some of the most common architectural styles you can find in Tempe, AZ:
- Found all throughout Maricopa County, ranch-style homes are single-story houses that commonly feature an open-concept layout and a devoted patio space. These homes are known for their long, low-pitch rooflines and large windows built along the front of the house. Ranch-style houses often vary in shape, with the most common being rectangular, “U,” and “L” shapes. Ranch-style homes also often include sliding glass doors that open onto the patio or backyard, attached garages, and finished basements, the last of which can be converted into home theaters, gyms, or additional bedrooms.
- Spanish Mission. Another common architectural style in Tempe (and the rest of Maricopa County), the Spanish Mission Style found widespread popularity between 1890 and 1915 and draws inspiration from the residences built by Spanish missionaries in California. Today, Spanish Mission-style homes can be identified by several features such as small parapets on the roof line and curved gable walls. Other distinguishing features include modest ornamentation, arched window, door, and arcade openings, and overhanging roofs with exposed rafters near the eaves.
- First popularized in the 1920s, Mediterranean-style homes take inspiration from different architectural styles such as Beaux-arts, Spanish Colonial, and Italian Renaissance, all of which help give them the look and feel of seaside villas. Mediterranean-style homes are known for several defining characteristics, including open-style floor plans, low-pitched and red-tiled roofs, and arched or circular windows.
- Tudor Revival. Dating back to the beginning of the 19th century, Tudor Revival houses take direct inspiration from the royal English architectural style from the Middle Ages. Commonly found throughout Phoenix’s historic neighborhoods, Tudor Revival houses typically feature a whimsical, storybook look, with the majority of them having large chimneys and high-pitched roofs, stone-fronted hearths, dark hardwood paneling, and exposed timber.
The perks of living in Tempe, AZ
Aside from the luxury real estate properties, Tempe, AZ is a location that provides top living conditions.
- Tempe, AZ has a stellar economy. Tempe, Arizona has a thriving economy that is supported by a number of top industries, including advanced business services, advanced manufacturing, biosciences and healthcare, and technology. Given the city’s robust economy, Tempe’s residents earn a median household income of $76,573, allowing them to live a relatively comfortable lifestyle.
- Tempe, AZ is a leader in education. Parents with school-age children will be delighted to know that Tempe offers outstanding education choices from preschool to graduate school. At present, the city is served by three highly regarded public school districts, namely Tempe Elementary School District, Kyrene School District, and Tempe Union High School District. In addition to public schools, there are also very good private options. Residents looking to pursue higher education can attend Arizona State University, Maricopa Community College, and the University of Advanced Technologies.
- Tempe, AZ has an abundance of shopping and dining options. For dining, shopping, and entertainment, Tempe residents need not look further than the city itself. Tempe is home to Arizona Mills, which offers a full mile of shops, and Tempe Marketplace, a large open-air mall that features live music on weekends in addition to its amazing selection of boutiques and restaurants.
- Tempe, AZ has no shortage of outdoor spaces. Given the city’s location in the Sonoran Desert, it’s not surprising to learn that outdoor recreation opportunities abound in Tempe. Tempe has over 2,200 miles of bikeways and is rightly considered one of the leading bike communities in the country. Moreover, the city also provides its residents with access to more than 50 neighborhood and community parks, including the popular Tempe Town Lake, which offers opportunities for boating, walking, jogging, as well as biking.
Explore Phoenix luxury homes with Carol Royse
For top-tier Phoenix luxury homes, work with an expert like Carol Royse.
Equipped with three decades of experience in the luxury housing market, Carol leads a dynamic team of 25 top agents and is considered one of the top-producing luxury Realtors in Arizona.
Industry leaders in every sense, Carol and her team have built a reputation for providing outstanding customer service, attracting a loyal circle of clients, and garnering sales of more than $150 million each year since 2018.
Aside from helping buyers find their dream Phoenix luxury homes, Carol and her team are also well-versed in helping homeowners sell and manage their properties, allowing them to make the most of their investments when they decide it’s time to put their properties back on the market.
Whether you’re a first-time buyer or an experienced investor, trust that the Carol Royse Team will go above and beyond to provide you with a seamless and stress-free home-buying experience every step of the way.
Ready to start looking at Phoenix luxury homes? Give the Carol Royse Team a call today at 480.776.5231. You can also send a message here to schedule a consultation.