Nationally, single-family home construction permits increased 24 percent last year, show data from the national home builders group.
In the El Paso area, the number of single-family home construction permits issued in 2012 declined almost 11 percent compared with 2011 to 2,902 permits, show data from local government agencies. The number of permits issued in El Paso and Horizon City decreased, while Socorro had an increase.
Randy O'Leary, president of Desert View Homes, a large El Paso homebuilder, said his company reduced home construction in El Paso last year because sales were slow in the first half of the year.
Desert View's biggest growth last year was in Colorado because the market dropped substantially there during the recession, he said.
"It was ugly" during the recession in the Colorado Springs area market where Desert View builds homes, O'Leary said. "There's a lot of pent-up demand (nationally). That's why you see the national market increasing more" than in El Paso, he said.
But home shoppers' traffic, and home sales have picked up in the early weeks of this year in El Paso compared with the start of last year, O'Leary said. He expects Desert View's El Paso sales to grow 8 to 10 percent this year to about 370 home sales.
Kesner, at Century 21 The Edge, said mortgage loan interest rates, which have been at historic lows for a while, may finally get potential buyers to make a move.
"I think people will begin to question how long these rates are going to be around," Kesner said. Mortgage interest rates have been under 4 percent in recent weeks.
Tougher lending requirements continue to make it difficult to get many potential buyers qualified for home loans, said Kesner and others in the industry.
However, Dena, at Accent Homes, said more buyers are now aware of what they need to do to meet tighter lending requirements, and more mortgage lenders are helping potential buyers clean up their credit so they can qualify for loans, he said.
Kesner said some appraisals continue to come in lower than homes are priced, which has killed some deals. Sellers of resale homes continue to help buyers with closing costs to make deals go through, he said.
Resale homes sold a bit faster last year -- staying on the market an average 86 days, down from an average 93 days in 2011 -- El Paso Realtors' data show.
Dena said Accent, and other homebuilders, are putting more amenities into homes, such as front-yard landscaping, decorative stone facades, and higher-quality floor tile, to satisfy homebuyers. Accent has been adding washers and dryers in some homes as an incentive to buyers, he said.
Accent also has begun putting solar panels on some homes to generate electricity, he said.
Many buyers are cash-poor and prefer to have more amenities added so those costs can be included in their home loan rather than try to add things later, Dena said.
O'Leary said homebuyers are sophisticated today and want more things included in their homes.
"A lot of us used to build a fairly basic product" and the buyer would add things later, O'Leary said. "Our biggest competitor is the resale market, and people want something different that they can't get in a used home. We have to upgrade appliances, come in with new designs and floor plans. It's forcing people (builders) to be on their toes."
Distributed by MCT Information Services
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