Summer 2024 | What's Going on in El Paso | Market Update | News

Summer 2024 | What's Going on in El Paso | Market Update | News

Welcome to Living in El Paso, Texas. My name is John Peña. Thanks for checking out the channel. With me as always is Alejandro Sosa. Alex, how's it going? Good. Everything good? Enjoying the heat? Yeah. We were talking about how the weather's been kind of nice, like quite honestly, but I think this upcoming week is supposed to be like over a hundred, so

but what can you do? Anything new happening? No, I mean work has been, you know, as everybody knows, not as busy as, you know, a typical summer, you know, but everything good. I've been working on the house, and I just came back from my trip from Mexico about a month ago.

It was a lot of fun. It was definitely something that I should have done a long time ago. Yeah, for sure. Yeah, taking breaks from work is definitely important. We're gonna do a live episode so that we can just like talk more about that because I know you have footage of it and everything, so that's awesome.

You're getting a cat. Yes, I'm getting a cat. I wanted to have it already, but unfortunately I have to wait until, you know, it gets the shots and all that stuff, so we're very excited. I haven't had a cat since I've been a little kid. It's usually dogs,

but you and your cats have kind of like made me now want a cat, so that's why we're getting one. Yeah, awesome. So I was just going to spit out just some like fun little things that I think are going on in the summer,

and then we'll jump into the real estate stuff, but we have some footage of this, but they've been working on this now for a couple of years, but in downtown El Paso there's going to be a new children's museum called La Nube. It's almost open. They're opening August 10th, so just a couple of weeks. I saw a video. They have like a

veterinarian care lab like for like kids to go in and like pretend that they're vets and like all this technology and crazy stuff, so it's really super hands-on, interactive, so I think that's going to be pretty awesome. This is just interesting to me because I run a lot in the Franklin Mountains. It sounds like they're actually introducing these like native desert bighorn sheep back into the Franklin Mountains,

so that's kind of cool. So if you're in the Franklin Mountains, and I'll put up some pictures if you see these guys, that'll be kind of a new thing. Big solar plant going out by Cattleman's Steakhouse. If you've ever gone to Faban's and checked out Cattleman's, there's a lot of land out there, and it's kind of cool to be able to do that.

Lots of celebrities were in El Paso the last couple weeks. Leonardo DiCaprio, Benicio Del Toro. Sounds like they were filming some big movie here in El Paso. That's awesome. Speaking of movies, right now, the Plaza Film Festival is going on, which is super cool, and then the only other thing I kind of

latched on to is it looks like they're going to be doing a movie about the El Paso River, which is super cool, and then the only other thing I kind of latched on to is it looks like El Paso's looking for a they're almost done hiring a city manager. The city manager, if a city uses one, is a super, super important role. They basically

decide a lot of the really important things that actually have impact on the community, from the budget to how the different departments are organized and structured, like everything. So hopefully we find a good one, and keep El Paso kind of moving along. So that's kind of what's going on in El Paso. Let's talk a little bit about the real estate market.

We're not going to hit this thing too much because, quite honestly, there isn't too much to say other than the market is pretty slow, pretty flat. Let me just give you some kind of general information here. This is just kind of about Texas real estate in general. One thing that's kind of interesting is that single-family deliveries,

which means basically new homes, is actually up. It says single-family deliveries will increase in 2024 relative to 2023, with almost 4% growth over last year. Construction will match pre-COVID levels. So we remember that during COVID, and then that year after,

how easy was it to get a new construction home? Impossible. A year. You had to wait at least a year to get a home. For sure. Yeah, anytime people would be like, oh, I want a new home. Yeah, we were like 6 to 12 months, and yeah, it was more like 12 months just because

there was a huge explosion in demand because the interest rates came down. So then all of a sudden everybody could buy a home, and then a lot of people, of course, wanted to buy a new home. But builders hadn't planned for that big surge, and then COVID blew everything up because it screwed up all of the supply chain.

So then, remember, they couldn't get lumber, and lumber was expensive, and you couldn't find appliances. So anyway, now it sounds like builders are back to kind of pre-COVID levels. So, I mean, that's a good thing that there's more new homes available. Are you seeing that with our buyers? Yeah, definitely a lot more new homes,

and I think it's good for buyers as well because it was very frustrating for them because you're like, hey, I want a new home, and the price is reasonable, and I want it, but I can't wait a year or six months. What I like now about the situation is there's a lot more options for buyers. Before, I was like, I like this Floor Plan A. There's nothing available for another six months or a month.

So now there's a lot more options for them to pick, and there's also incentives from the builders because you would feel, hey, now it's very busy. The incentives are not gonna be the greatest. So it's still slow, but enough that there's inventory for everybody, and again, the incentives are still pretty good for the most part for most builders. Yeah, for sure, 100%.

And we're gonna talk about that incentives because we do want to talk about this commission thing that's playing out. But I'm just kind of talking overall still kind of Texas nationwide. Home sales have not bottomed out, and total sales are expected to remain flat in 2024 compared to last year.

Of course, we say this all the time, but lower interest rates for at least part of 2024 may boost this somewhat. That's assuming that the interest rates are going to come down a little bit at the end of the year, which is possible, but I wouldn't hold your breath. And then it says new sales will continue to account for a larger than average share of total sales around 20%.

So those new houses are definitely popular, and I guess let's use that to kind of transition into the elephant in the room. However, we've been talking about this for a long time now, but very, very important if you're buying or selling a home right now to understand that

the commission structure has definitely changed. Let me see how fast I can sum this up. In the past, typically when you sold your home, you, the home owner, would pay not only your real estate agent a commission, typically 3%, you would also pay the buyer's real estate agent another 3%.

So typically a homeowner would pay 6% of the sales price, half of that going to their real estate agent, half of that going to the buyer's agent, right? The real estate agent who brings the buyer to purchase your home. Big lawsuit, changes are in place. So what's the difference? Now,

homeowners are not going to be kind of bullied, manipulated, pushed into kind of paying the buyer's agent. Listing agents are going to, which they should have been doing from the beginning,

but listing agents are going to have to be very upfront about, look, Mr. And Mrs. Seller, let's agree that you're going to pay me X percent to sell your home, typically 3%. That number isn't really going to come down. Will you be able to discount it? Of course, but that number is pretty much going to stay 3% to sell your home.

But now you're going to have to, the listing agent is going to have to kind of have a conversation with the homeowner and be like, how much, if anything, are you willing to pay a buyer's agent? So this is a big change. For instance, I can use some of our listings as an example. We have one listing right now in the Far East and the seller has said, you know what, we're open to paying

2% to the buyer's agent. So now what's happening is that buyer's agents, this is happening to me all the time, they'll call me and they'll say, Hey, I like your listing at 123 Main Street. How much is the seller willing to pay the buyer's agent? And then I tell them 2%. And then they can say, okay, great. And they'll maybe go back to their buyer.

And this is where it's really, really important because if you're a buyer, you have to have this conversation up front with your agent about what it is you're going to agree to pay them. So let's say that in this example, the buyer agreed to pay their buyer's agent 3%. On this listing that we're offering only 2%,

if the buyer purchases this home, the buyer is going to have to pay that additional 1%, right? Because the seller will pay 2% and then the buyer themselves, this is completely new, for the most part, the buyer would have to pay that 1%. So really important. Any thoughts on the commission stuff?

No, I mean, obviously it's a huge change, but I feel like at least in my experience, a lot of the buyers don't know, like they feel like they have to pay for the commission. So a lot of the times before I was like, hey, you guys don't pay for the commission, the seller is the one to pay. So now it's going to be, like you said, slightly different,

but I really don't think it's going to affect a lot of people. Like, why would I want to pay a buyer's agent as a seller? But in my opinion, it's very important that you have an agent representing both parties because there's just so much that can go wrong. You definitely, definitely want both agents. For sure. Yeah.

And the only way to not have an agent if you're selling your home is, of course, to do for sale by owner. And then, of course, you're doing everything as far as pictures and promoting and da, da, da, da, da. And then, of course, yeah, not a great idea to not have a real estate agent if you're a buyer because how are you going to write the

offers? There's so many variables that happen within a transaction that you could stumble over and lose money, jeopardize your earnest money, not do the inspection right. Like it could be a big mess. So super, super important. If you want more information, just reach out to us.

We'll be more than happy to explain that to you. And then finally, just kind of in general, how is the El Paso market? I mean, it's pretty slow. This is just for El Paso. Basically,

active listings are up over 30 percent from last year, which means that a lot of homes are still being put on the market for sale, but they're not selling. And so inventory is growing. For instance, right now, there's about three and a half months of inventory,

whereas last year there were two and a half months. So the amount of homes for sale in El Paso is more substantial. That's because homes aren't selling and that's because there's less buyers, which is because of lower interest rates. And a lot of buyers are just kind of sitting on the fence. Yeah, and that's just the way it is. But I mean, that's how real estate is.

We always talk about it like as a roller coaster. It's up and it's down. It's up and it's down. And right now it's down. There's no sugar coating it. It's down. If you're a seller and you have to sell your home, cool, price it correctly and it'll sell. It might take a while, but it will sell.

But if you're like a homeowner and you're like, I'm going to sell my home for, you know, like more than it's worth, no, you're not. It's not going to happen. Not to say that you wouldn't find a buyer

who maybe agreed to pay that price, but then you have to remember if they're using a loan, they're going to do an appraisal. I just had this happen. And if the home doesn't appraise for your top dollar price that a buyer agreed to, guess what? The lender is not going to give them a loan and the deal is likely going to fall apart. So

keep that in mind. Like I said, homes are still going to sell. Buyers are still going to buy. But right now it is pretty slow, pretty flat. What's going to change that? Of course, I would imagine that 2025 will see lower interest rates, assuming inflation isn't crazy. And, you know, the roller coaster will

climb back up. Yeah, it's interesting to see how just everything changes. And then there's times they hear information that you might, okay, I think this is how it's going to be, but it's just, we never know, right? So you just have to, you know, keep working and hoping that it gets better. Yeah, absolutely. And help the people that need the help now. Some people have to sell for whatever reason. Some people, you know,

I mean, an interest rate of six, seven percent isn't the end of the world. And if you want to buy a house for your family or whatever, and you have the money and you get approved, cool, buy a house. You know, if the interest rates come down later in a couple of years, refinance. Yeah. And it's crazy how much El Paso is growing. We have a lot of

buyers who come back to El Paso and they tell me literally like I visited two years ago and like Horizon area is just completely different. We're talking about it. We did a video. Miguel did aerial footage of Horizon at the beginning. It's just completely different. So even if it's slower, there's still a lot of people moving in and out and El Paso is growing.

So yeah, I always say this, but I'm just excited to see the future. Yeah, for sure. What's going to happen. Yeah, for sure. And now with all those, a lot more new homes available, that's exciting. Then that brings me back to those incentives. The great thing about a lot of the new homes is that the builders are going to pay the buyer's agent that three percent. So

buyers aren't going to have to come out of pocket for their buyer's agent and their closing costs a lot of times they're getting covered. So that's why obviously new homes are so popular. Yeah, definitely. All right. Well, I think that's it. Thanks for checking out the episode and we'll see you next time.