El Paso realtor and businessman Scott Kesner was installed as chairman of the Texas Association of Realtors two weeks ago.

The event was particularly significant because Kesner is the first El Pasoan to chair the association since 1957, when William J. Elliott had the job.

The association, with 95,000 members, calls itself one of the largest and most influential trade associations in Texas. It is the largest real estate lobbying group in the state.

Back when Elliott chaired the association in 1957, it had a budget of $76,000, according to Kesner. This year’s budget: $14 million.

Kesner, 52, grew up in a small Texas oil town called Ira, which is outside of Snyder, another small town.

“The joke is, I was in the top 10 of my high school graduating class – there were only eight,” Kesner said.

He earned a bachelor’s degree in criminal justice from Sul Ross State University. Kesner worked as an adult probation officer for three and a half years in his hometown before moving to El Paso, his wife’s hometown, and getting his real estate license.

He has been selling real estate in El Paso for more than 20 years, and is now the owner of Century 21 The Edge, which has two offices in El Paso and one in Midland.

Kesner has been involved in various capacities with the Texas Association of Realtors, known also as T-A-R but not as “Tar,” for more than a decade.

He has been inducted into the national Realtor Political Action Committee Hall of Fame and was a trustee for the Texas Real Estate Political Action Committee from 2005 to 2008. He also teaches at the Academy of Real Estate in El Paso.

The walls of Kesner’s office are decorated with a framed Texas flag and photos of the construction of the Texas Capitol. A shelf is covered with his kids’ sports trophies. He and his wife, Paula Ivey, have three kids.

Kesner sat down with El Paso Inc. and talked about the association’s priorities, how the El Paso housing market has gone soft, the Zillow issue and why rising student debt is a problem that needs to be addressed now.

Q: Why did you want to be chairman of TAR?

I thought I could help and certainly thought that El Paso needed a voice at the state level, since we hadn’t had one since 1957.

Q: What does the association do?

We protect private property rights in the state of Texas; we’re the advocate for property owners. That’s the snapshot of it.

Q: What are the association’s top priorities now?

No. 1 has to be the next legislative session in January, because it’s an unknown and we don’t know what is going to happen.

No. 2: The National Association of Realtors has just introduced what they call core standards. Each association must meet these minimum standards to maintain their charter with the national association. We have about 68 associations in Texas and we need to help every one of them meet the standards.

No. 3: We’ve got to deal with the population growth in Texas. We have Proposition 1 coming up Nov. 4.

Q: You’re talking about the proposed constitutional amendment that, if approved by voters, would dip into surging tax collections on oil and gas production to fund new road projects and maintenance?

Yeah. Between 1970 and 2010, we added 30 million people in Texas and in the next 40 years, by 2050 or sooner, the population is expected to double. That’s double the schools, double the churches, double the shopping, and more houses. There needs to be the water and the roads, the infrastructure, to support that growth.

Q: TAR is supporting Proposition 1?

Very much so. It’s key.

Q: How does the El Paso real estate market compare to others in Texas or the state in general?

We have a very unique housing market. Statewide they’re probably looking at a two- or three-month supply of housing. When I say that, I mean if no properties are listed today, how many months until you have no property for sale.

In El Paso, it’s around eight months. We recently broke it down by ZIP codes. It was really surprising. We only found one below eight months in El Paso.

Q: And a balanced market is between five to seven months of inventory.

We have a slower housing market, and we also have a slower rental market than the state as a whole. I did a search today and just in East El Paso there are 456 houses available for rent.

Q: Typically, soldiers are assigned to a post for three years, which means those soldiers who bought homes when Fort Bliss was growing have now mostly been reassigned. To sell their homes, those soldiers may have to compete with the homebuilders they bought their homes from, so many are just renting them out for now.

Yeah. You are right on. We have a large inventory of homes in the sales market, but we also have a large inventory of rental homes. Remember when Fort Bliss really started growing and we were told a number of years ago that there wasn’t enough housing? Housing symposiums were held. Well, I don’t know. It is going to be an interesting next couple of years.

Q: Given that there is a lot of supply, does that mean prices are falling?

You would think, given basic economic supply and demand principles, that you would not see any appreciation with that much supply. But we’re still seeing some appreciation in El Paso.

One of the big issues we have here are people not being able to qualify for loans, and the feds have certainly not made it any easier to get mortgages.

Q: Is an eight-month supply something to be concerned about?

Yes and no. The market is what the market is. While it may be more difficult to sell a house, it is a buyers market. If you have a house to sell then we need to sell it, whether there’s a one-month inventory or an eight-month inventory. At the same time, if you need to buy a house, then our job is to make sure you get in a house.

Q: The El Paso foreclosure rate also ticked up a little in August. Is the housing market overbuilt?

Is there an oversupply? Possibly. But the builders are not going to build unless they can sell their inventory. If anybody learned from the bubble in 2006, it was probably the builders. They went through the crash, and I don’t think money is going to be available to overbuild.

Q: What is going to drive El Paso’s housing market in the future? The El Paso economy is particularly reliant on public spending, but government budgets have been strained and Fort Bliss is no longer growing.

The military and the maquilas are always going to be a driving force for this market, but I think the city’s leadership has a vision for growing El Paso’s private sector. Downtown revitalization is going to be key.

We’re going to have to maintain a price point that people can afford to buy, and preserving FHA financing and Fannie Mae and Freddie Mac is going to be particularly important for the El Paso market.

Q: What’s your best guess as to how the El Paso and Texas housing markets are going to perform over the next year?

The El Paso market is going to do well as long as we can maintain the financing I mentioned.

Texas is going to continue to grow. People will continue to move here because of the jobs being created.

One of my biggest concerns is that we have an entire generation of people coming into the housing market that owe so much money on student loans that it’s impossible for them to qualify for a house.

Q: The millennials who tend to live in apartments and are not buying homes like previous generations.

Right. I have a daughter who is 25 years old and she is certainly experiencing how expensive college is. Her husband is going to medical school.

Student loan debt is an issue that will have to be dealt with eventually, so the sooner we deal with it the better. Are millennials in apartments because they want to be or because they can’t buy a home? Who knows? What we do know is it will be an issue going forward.

Q: When the real estate market took a nosedive in 2008 and 2009, what happened to TAR’s membership?

We went down to probably 83,000 or 84,000, and then we’ve constantly built back up. Our high was probably around 94,000 or 95,000, so membership is now probably the highest it has ever been.

It did dip down in Texas, but not like other states. Georgia probably lost 50 percent of its membership. The Seattle area lost a bunch. But you have to remember; the Texas market did not have the big bubble and crash that the other markets had.

Q: The El Paso market didn’t crash, but there was still a decline and some real estate agencies in El Paso did get into trouble. How did Century 21 The Edge pull through?

Well, everybody had to reevaluate their expenses. We cut back on some advertising and items like that. I will say we did not lose a single employee. Did my wife, who is also an agent, and I get paid every month? No, but we just survived.

At the peak, we were probably at between 100 and 130 agents. We’re now down to about 80.

Q: There has long been talk about doing away with the mortgage interest deduction. Why not do so? Economists often argue that the deduction mostly benefits those with higher incomes and encourages people to buy larger homes and with more debt.

Let me ask you a question. When was the mortgage deduction added to the tax code?

Q: I’ll take a guess. The 1950s?

No. It was never added. It was part of the original tax code in 1913. More than 75 percent of homeowners utilize the deduction at some point, so if you take it away, you’re looking at just a huge impact. We estimate it would cause a 15-percent drop in home sales almost immediately.

Supporting home ownership is important and it is still part of the American dream. People who own homes generally take better care of their property and even their kids tend to do better.

Q: People can now go to websites like Zillow and see all kinds of information about homes in their area including a home value “Zestimate.” The national realtors association has pushed back. Realtors say the information is not always accurate and the sites “steal” leads only to sell them back to real estate agents.

It is a huge issue. Our position is that we need to be perfectly clear where the information came from and how accurate the information is and what was the source of the information.

Zillow and Trulia are marketing companies. They advertise real estate. We just need to make sure the public realizes that we don’t just sell houses; we’re their advocates. We are advocating on behalf of homeowners for private property rights and the other things we have talked about.

Texas is a non-disclosure state, so when Zillow reports a sales price it is only an estimate. That’s why they call it a “Zestimate.”

Q: That Texas is a non-disclosure state means that sales prices don’t have to be disclosed. In El Paso, the realtors association has not made sales price data available to the Central Appraisal District. Wouldn’t it improve the accuracy of valuations if the association were to do that? Why not disclose the data?

The Central Appraisal District does a good job of setting residential home values, and we will share some sale prices. Years and years ago, supposedly the data was not being used for Central Appraisal District purposes but was being released to the public.

Q: That was years ago. Can’t the realtors and Central Appraisal District make up?

There is always room to work out issues and solutions to problems.

Q: Since it is a buyers market right now, any tips for those trying to sell their home?

Everybody talks about staging the inside, but you also have to stage the outside, because you have to get them into the house. It has to be in good condition, de-personalized and de-cluttered.

You need to price it based on the local market and not what Zillow or Trulia say. Pricing is key. Your realtor will give you a snap shot of what has happened in the past 30, 60, or 90 days and you can see how the inventory of homes is moving each month. It’s just phenomenal what they can do.

Q: Where are the hot markets in Texas?

Midland and Odessa, for sure.

Q: Where there is an oil rush.

And markets as big as Austin or Houston or San Antonio.

Q: Why have you stayed in El Paso?

I love El Paso. I mean, the people are great, the food is great and we rarely go out when we don’t meet somebody we know. Plus it’s the safest city in the nation.


Email El Paso Inc. reporter Robert Gray at rsgray@elpasoinc.com or call (915) 534-4422 ext. 105. Assistance by editorial intern Ernie Chacon. 

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