In a year that’s anything but normal, El Paso’s housing market is flourishing, with low inventory and fast-flying sales.
“Sellers are getting top dollar for their homes, with multiple offers,” said Arat Fraga, a local realtor.
The rise in home sales is not necessarily due to more families staying in during the coronavirus pandemic, though experts have said all that time at home has led homeowners to spend more money on improvements or new spaces.
But according to El Paso home builders and realtors, the biggest driver of the recent bump in home sales has been historically low interest rates.
The interest rates on home loans have hovered under 3% for weeks now. In El Paso, there’s also a low inventory of available houses for sale, and home builders are working overtime to match their inventory to demand.
Randy Bowling, president of Tropicana Homes, said the company is building 250 homes and about 200 apartments in El Paso County in 2020, and that home sales are up across the city.
“It’s been strong all year. In March, when everything shut down, there was nothing for two or three weeks. As things are opening back up, it’s been a real strong housing market,” Bowling said. “It’s back like it was in 2004, 2005, where there’s very little inventory right now. Almost everything is sold.”
The median house price in El Paso is at about $184,950, up 12% year-over-year, according to Redfin, a real estate brokerage company.
Bowling said the home sales are not concentrated in any one part of the city, but that all parts are seeing a rise in sales.
“For people in El Paso, if you grew up on the Eastside, you’ll typically be living on the Eastside,” Bowling said. “It’s not any percentage higher over there than any other part, and it’s all up 50%”
He added that other factors, like more time spent both working and living at home, might contribute to the strong market.
“I think that people have been at home so long that it’s dawned on them that maybe they need to be spending more on where they live, that it may be more important moving forward,” Bowling said. “Our model homes have been open, and home building is an essential business. The lack of things to shop for, more emphasis on where you live and the fact that we’ve been open, play a role for me as well.”
Bowling is also president of the Texas Association of Builders and said El Paso’s housing market is not alone in its strong performance.
“It’s very strong everywhere throughout the state of Texas. I don’t know as much outside the state,” Bowling said.
Bowling added that the El Paso labor market has also been tighter than normal for the construction industry, and that there’s more work than labor available.
“Things are delayed. What would normally be a four or five-month process from start to finish on a house, add a month or two,” Bowling said. “Everyone got busy all at once. It’s not like you can just run an ad for five plumbers. It requires licenses and a level of skill that takes training. When it hits all at once, there’s a backlog on filling the job with enough skill to do what they need to do.”
He said the buyers he’s seeing for Tropicana homes tend to mostly be El Pasoans moving around El Paso instead of those moving back or into the city.
Realtors and sellers are also facing crunches related to the low number of houses available on the market.
Fraga said the low interest rates are leading to houses spending just days on the market before receiving multiple offers.
“The inventory, with houses selling right now, there’s a shortage in El Paso, not only on the west or Eastside but El Paso as a whole,” Fraga said. “With that lack of inventory, we’re looking at prices going up.
In a market absorption rate report, Patrick Tuttle, an El Paso real estate agent, said home inventory is extremely low, which is good for sellers.
“If you have a resale home and are priced appropriately for the condition it’s in, you’re going to sell,” Tuttle said in the report.
Almost 1,000 homes sales occurred in July, and inventory remains tight, according to the latest Borderplex Business Barometer published by the University of Texas at El Paso.
“The propellants behind the sales increase in June and July were the potent brew of historically low conventional fixed mortgage rates plus pent-up demand from the April-May pandemic lockdown,” the report states.
Fraga added that buyers should be prepared to compete against a handful of other buyers on a single house.
“Houses below $250,000 and $300,000 are the ones spending less time on the market,” Fraga said.
Some sellers are also receiving offers above the listing price. According to Redfin, 25.8% of home sales were above the asking price, up from 14.7% in August 2019.
Email El Paso Inc. reporter Sara Sanchez at email@example.com or call (915) 534-4422.