Surrounded by Franklin Mountains, the semi-arid, warm steppe climate and largely inhabitable rocky land of El Paso hardly made it a real estate attraction in the past. But today El Paso is reckoned as one of the fastest growing major cities (7th to be precise) of US. El Paso’s transition into a new economy has made it a home for more than 70 Fortune 500 companies. No wonder such breakthroughs have triggered an exponential growth of the city’s population which is reflected in the trends of the city’s real estate business.
Booming Real Estate Market
Until recently El Paso was often identified by the experts as the most-undervalued real estate market of US. One could attribute that to its harsh climate or to its comparative unsuitability for trade. But lately improvements in trade with Mexico, for whom EL Paso serves as a major transit point to US, has catalyzed El Paso’s economy as well. That has led to increased prices of real estate as well. Until 2 years back, median house auction price at El Paso was a little more than half of the national average. But while national prices have showed negative growth since 2006, El Paso is exhibiting an upsurge in average house auction prices. In 2005, average price for a house auction was $ 120,000. By the end of 2007, it grew 33% to touch the mark of $ 160,000. Other than this, the rental rates of houses in El Paso have increased too. Although El Paso is only the 5th biggest city of Texas, rental rates in El Paso are already competing with the 4 biggest cities of Texas. Such phenomenal hikes in real estate prices indicate the growing interests of people in El Paso.
Fear of Foreclosures
But there are some serious concerns regarding the real estate market as well. Real estate foreclosures are considered quite ominous for the economies, which can indirectly affect the real estate market. The industrial ‘Rust-Belt’ states of Northeast were severely hit by high real estate foreclosure for the last few years. But now some reports suggest that this trend is shifting more towards coastal and ‘Sun-Belt’ states. In fact, the average rate for house foreclosures for Texas has jumped up to as high as 1 house foreclosure for every 205 houses. In a list of 500 top foreclosure zip codes of US, 22 are already from Texas. Foreclosure auctions are usually done to settle outstanding debt. That is why houses are often auctioned way below their actual value. Usually the auction price goes down by as much as 50% of the actual open market price. This is quite detrimental for real estate market. But thankfully, it is quite a relief for El Paso that none of its territories figure in 22 zip codes of Texas figuring in the top 500 disclosure zip codes list. So it is believed that for at least now, house foreclosures don’t threat El Paso much.
That is not only good news for the real estate market of El Paso, but for the other business activities flourishing in El Paso too.
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