Market Updates
Market Updates
STILL In a Sellers' Market in El Paso Texas? | Spring 2023 [English]
Is El Paso still in a seller's market in spring 2023? Yes, surprisingly. Even with higher rates and fewer buyers, supply is so tight that sellers still hold the advantage.
You would expect buyers to have leverage now, with rates around 6% to 7% versus about 3% a year ago and many rate-locked owners staying put. But it still comes down to one word: supply. El Paso has just under three months of inventory, about 2.7 months, well below the six-month line that marks a neutral market and far under the seven-plus months that would favor buyers. So while it is not the frenzy of a year ago, when homes drew multiple offers and bids ran $30,000 over, it remains a seller's market and still a pretty good time to list.
Video transcript
STILL In a Sellers' Market in El Paso Texas? | Spring 2023 [English]
Hey El Paso, are we still in a seller's market? You wouldn't think so, but we are, and I'm going to explain it to you. My name is John Peña with Peña El Paso Realty Group. If you are looking to buy or sell a home, please consider reaching out to us.
And you would think that right now we are not in a seller's market. A seller's market means that the sellers basically have an advantage over buyers when it comes to negotiating prices and purchasing homes. However, you would think that buyers would have an advantage because right now the demand
for homes is significantly lower than it was because of these higher interest rates. So a year or so ago, a buyer might have been able to get an interest rate of around 3%, whereas now interest rates are around 6% to 7%. So you would think that there would be less buyers and that would put them in a position
of superiority as far as leverage and negotiating. Also, you would think that a lot of folks aren't in a position to upsize, downsize, relocate because they're rate locked, meaning they own a home and they've got that great 3% interest rate, but they don't want to lose it.
They don't want to sell their house and go buy another one because then they have to trade that great interest rate for a higher interest rate. However, believe it or not, we are in a seller's market in the entire country, in El Paso, and let me tell you why.
The reason why we are still in a seller's market comes down to one word and that is supply. The supply of homes is still historically low. Right now, basically we have what's called three months, less than three months of inventory
or absorption rate. And really what that means is that if you take the number of active homes and you divide that by the average pace that homes are selling, you'll get the absorption rate. And what it really means is that if no more homes came onto the market right now, it would
take just under three months for all of the homes in El Paso to sell. Now six to seven months of inventory is considered a neutral market where buyers and sellers are essentially equal. If there's over seven months of inventory, that means that there are a lot of homes for
sale and that of course is to the advantage of buyers because they are going to be able to have a lot more options and they're going to be able to low ball people on their prices and sellers are going to have to kind of take what they can get. However, if the months of inventory is under six months, that is a huge advantage for sellers
because it simply means that there aren't enough homes out there and there are still plenty of people who want to buy homes. And unfortunately for them, they're competing still over a smaller number of homes. So right now, like I said, El Paso, we're at about 2.7 months, well below that six month
threshold. So like I said, we are actually still in a seller's market. Now it's not the crazy seller's market that we saw a year or so ago where every home was getting multiple offers.
People were bidding $30,000 over just to outcompete the other buyers. We're not in that kind of seller's market. But for sellers, if you are considering selling your home, now it's still a pretty darn good time.
So for this type of information and information about El Paso, our great city, please consider subscribing to the YouTube channel and we'll see you in the next episode.
