The city of El Paso is looking rather affordable, according to a recent report by a major university. According to its “Real Estate Market Overview 2008: El Paso” report, the Real Estate Center at Texas A&M University found that the city is behind the statewide average in terms of multifamily property rents as well as sales prices for residential properties.
The fifth largest city in Texas, El Paso is also considered one of the nation’s fastest-growing metropolitan areas. Situated on the Rio Grande and tucked into the foot of the Franklin Mountains, El Paso is just across the border from Mexico. In 2000, the city had a population of 1.3 million and is home to such major employers as the University of Texas at El Paso and Fort Bliss, a U.S. Army installation.
According to the Texas A&M report, average rent per square foot for an El Paso apartment was $0.70 in 2007, as compared to the statewide average of $0.80. However, the city lay ahead of the curve in terms of average occupancy: Occupancy for El Paso apartments was 94.8 percent, while the statewide average was 92.8 percent.
Residential property prices within the city were more than $15,000 less than the state of Texas as a whole in 2007, making El Paso a potentially attractive place for investors. According to the MLS, the median price of a home in El Paso was $131,700, as compared to $147,500 statewide and $217,800 within the United States. In November, the El Paso Times reported that El Paso was ranked as the 39th most affordable housing market out of 116 college towns, according to a study done by Conference USA.
![filekey=|2665| align=|left| caption=|El Paso real estate pricesand foreclosure rates are low compared to other Texas cities | alt=|Thye skyline of El Paso Texas|]El Paso is also looking better than much of the country in terms of mortgage loan delinquencies; the El Paso Times reported this month that the city ranks 237 out of 381 metro areas in terms of delinquency risk. Those rankings were part of the Core Mortgage Risk Index produced by First American CoreLogic. That company tracks foreclosures and other home-related statistics.
In terms of development land, the report finds that the greatest prices per acre were amongst office space in El Paso’s Central Business District, ranging between $1,089,000 and $1,306,000. Land in the city’s office parks ranged between $196,020 and $283,140 per acre, while retail and commercial land ranged between $283,140 and $348,480. One major development currently on the table is a wide-ranging medical campus slated for a 16-acre lot now occupied by the dilapidated Cliff Inn Hotel. TVO Development is spearheading the project, known as City View Medical Plaza.
In addition to boasting the greatest per-acre prices, El Paso’s Central Business District is also continuing a years-long increase in terms of inventory, occupancy, and net absorption. According to the Texas A&M report, inventory in the CBD increased to 3,120,560 square feet in 2007 from 2,862,888 square feet the previous year. Occupancy also increased to 76 percent in 2007 from 72.4 percent the previous year, and net absorption clocked in at 85,000 square feet in 2007, a jump from 62,000 in 2006. Downtown inventory has been on the rise since 2005, while occupancy and net absorption have all increased since 2004, according to the report.
The industrial sector continued to expand in 2007, with inventory increasing to 58,690,500 square feet from 57,850,000 square feet the year prior. Occupancy also remained robust, rising to 93.8 percent in 2007 from 92.6 in 2006. Reversing a negative trend two years running, net absorption rose to 1,560,000 square feet from 1,250,000 square feet in 2006.
Recent political developments may also be the bearer of good tidings for El Paso. It has been speculated that the nomination of New Mexico Gov. Bill Richardson as secretary of commerce should benefit border cities given the governor’s efforts to increase business in the region.