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Mid Winter, 2010
Current Months of Inventory 8.1 MOI
a mild Buyer's Market
(improved from 12.6 MOI on 12/06/08)
City wide, all areas and prices
Overview of the MOI calculation: Real estate economists use MOI to view market balance related to the market balance point (6.5 MOI). MOIs greater than 6.5 define an over-supplied, decreasing value, "Buyer's Market" condition. MOIs less than 6.5 define an under-supplied, increasing value, "Seller's Market" condition. The greater above or below the 6.5 balance point, the more profound the changes.
All real estate markets are local, and all local markets are segmented. This means that real estate market conditions are often different from state to state and city to city, neighborhood to neighborhood, and even house to house. Each of those markets are segmented into often very different performing markets.
Why care about this at all? As an informed consumer, knowing more about your intended purchase or sale than the uninformed consumer is generally a position of power. Knowing the state of current supply, current demand, and anticipated changes in supply and demand, puts you into a much better position to make highly informed decisions. Knowlege truly is power, and can mean a savings of thousands of dollars and much greater peace of mind in your next real estate transaction.
It is generally incorrect to state that there is purely a buyer's market or purely a seller's market in any given location. We find that even where general market conditions are in one extreem, there are nearly always certain types of property within the general market that are performing in the exact opposite manner. This behavior stems from differences in supply and demand within the market segments for specific property types, areas, price bands, and other specific differences.
At Skye we use market analysis to define the general market within our city, and also subsegments of the market including by area, school, type, and others - right down to the characteristics of the individual property. The results provide very useful information to the client to help in decision-making regarding a sale or purchase strategy, particularly regarding market-balance-based price setting. Here, we not only look at comparable properties, but also market conditions in setting strategies.
We employ three primary tools in the analysis of market conditions:
1. The Multiple Listing Service data base of Active Listings, recently Closed Listings, and current Pending Listings.
2. Use of government supplied market statistics for city-wide data, from this location: http://recenter.tamu.edu/data/hs/hs220b.htm
3. Months Of Inventory formula and Pending analysis.
Current El Paso Ecomomic Forces: El Paso is in an enviable position relative to many other areas of the country. We are now feeling a mild improvement in real estate sales compared to 2008, and moderate reduction of inventory. 2009 MOI readings indicate an improving market, on average, with some segments doing better and worse than average.
El Paso's current population of 630,000 is in strong growth mode from two major sources: First is the planned addition of 30,000 new military personel, and 30,000 accompanying or related new citizens over the five years ending in 2013. This influx is a result of the US government program for Base Realignment, which serves to reduce military expenses by better managing it's troops and bases of operations. This effort alone will add 10% to the city population over 5 years.
Secondly, El Paso is home to the first new 4-Year medical school to be built in the country in the last 20 years. The magnificent Texas Tech Paul Foster Medical School, plus new health research organizations, and a newly funded Children's Hospital, are the catalysts for the hiring of 5,400 MD, PhD, and other high skill people over the next 5 years. It is estimated that another 10,000 associated people will move to El Paso in accompanying moves over the same period due to medical expansion. Further, military base expansion means that the existing Beaumont hospital complex will also expand its mission on general troop and family health and also, its expertise in trauma care. The medical growth is very likely to cause El Paso to become a national force in medical knowlege, particularly as this relates to border health issues and severe trauma care.
We have other very bright spots in the local economy. Having successfully transitioned over the past 40 years from a lower-skilled center for garment manufacturing, then to a national force in higher skilled, technology-driven manufacturing (automotive and electronics), the city is now adding a far reaching military support system, and is expanding its technology support base. REDCO, the nonproft organization charged with El Paso and Cuidad Juarez, Mexico economic development, is now in talks with over 103 prospective firms considering El Paso for their future expansion.
Geographically, El Paso is poised to benefit from the ever growing InterAmericas Commercial Trade Corridor (North-South), connecting all of South America, with Central and North American economies. Commercially, we are also very well poised as a primary junction for Asian, European, and Amercian (East-West) commercial growth.
It's just a nice place to live! Couple all of this with one of the lowest crime rates in the country, one of the lowest cost of living locations in any state, and possibly the best weather in the world, and you have a city with a very bright immediate and long term future. Today, our living city culture is heavily influenced by our origins of Spanish, Native, middle-Americas, Oriental, and European settlers. In the end, we are a comfortable, affordable, exciting, and good place to live and raise families.
Our latest market report is an email or call away. Ask for a customized report on your specific property interests. Our techniques allow us to study market conditions right down to a single property.... yours! Agents and brokers named herein are licensed salespersons in the State of Texas.
