MARKET SNAPSHOT
$1,065 3Q 2024
95.4% 3Q 2024
42 [YTD: 545]
2.4% 3Q 2024
0 BASIS POINTS
0 [YTD: 286]
Rental demand in El Paso is on a strong upward trajectory, with net absorption through the first three quarters of 2024 nearly doubling the number of new deliveries.
Unlike the markets in the Texas Triangle, El Paso is not experiencing a major wave of multifamily development. As of the end of September, approximately 900 units were under construction, representing only 1.9% of the area’s total inventory.
Annual rent growth in El Paso is forecasted to rise above 3.0% next year, supported by its strategic position as a logistics center and bolstered by Fort Bliss, UTEP, and large-scale economic initiatives.
Rental demand in El Paso is on a strong upward trajectory, with net absorption through the first three quarters of 2024 nearly doubling the number of new deliveries. A significant driver of this demand is the Outlying El Paso County submarket, where over 340 units were absorbed on a net basis over the past year. This submarket has seen substantial expansion in recent years, with apartment inventory growing by 45% over the past five years, reflecting sustained interest and demand in the area.
Unlike the markets in the Texas Triangle, El Paso is not experiencing a major wave of multifamily development. As of the end of September, approximately 900 units were under construction, representing only 1.9% of the area’s total inventory. Over the past 12 months, most new completions have been concentrated in three key submarkets: Westside (138 units), Northeast (134 units), and Outlying El Paso County (80 units). Nearly all of the 900 units currently under construction are projected to be completed and available by the final quarter of 2024, with only minimal deliveries expected for 2025.
El Paso’s occupancy rates remain notably strong relative to the Texas state average, reaching 95% by the close of the third quarter and well above the national average. Steady absorption has continued to support a balanced multifamily market, with particularly robust demand in the mid-tier property segment. Notably, all three major property segments of the local apartment market saw positive demand growth over the past year, highlighting broad renter interest across asset types. At the submarket level, annual occupancy changes were tightly clustered, with shifts ranging from a slight 50-basis-point decline to a 20 basis-point increase, signaling a stable and resilient multifamily market in the region.
Following a year of heightened development activity, El Paso’s apartment market has rebounded solidly in 2024, sustaining healthy rent growth. By the close of the third quarter, average rents had risen by 2.4% year-over-year. Although rent growth varied among submarkets, all except Northwest El Paso County posted positive gains, with the Fort Bliss submarket leading at a 4.8% increase, supported by a stable military and military-adjacent population. Looking forward, El Paso’s apartment market is well-positioned for continued growth, with rents projected to increase between 3% and 4% by the end of 2025. This positive outlook is bolstered by the city’s strategic location near a major military installation, a strong job market, and a steadily growing population base.
El Paso saw steady job growth in August 2024, with 5,800 new positions added, reflecting a 1.7% year-over-year increase. The Government sector was a significant driver, contributing 1,900 jobs (2.7% growth), while Education and Health Services and Leisure and Hospitality sectors each added 1,000 jobs, growing by 1.9% and 2.4%, respectively. This growth highlights El Paso’s economic diversity. Additionally, the unemployment rate held low at 4.7%, a 10-basis-point improvement from the previous August, indicating continued labor market strength.
August 2024 ANNUAL JOBS CREATED
AUGUST 2024 EMPLOYMENT GROWTH
AUGUST 2024 Unemployment rate
4.2% us August rate
Nominal Change
from August 2023
to August 2024: 1,900
Percent Change: 2.7%
Nominal Change
from August 2023
to August 2024: 1,000
Percent Change: 1.9%
Nominal Change
from August 2023
to August 2024: 1,000
Percent Change: 2.4%
Nominal Change
from August 2023
to August 2024: 900
Percent Change: 2.3%
Nominal Change
from August 2023
to August 2024: 700
Percent Change: 1.0%
| Sector | Nominal Change from August 2023 to August 2024 | Percent Change |
|---|---|---|
| Government | 1,900 | 2.7% |
| Education and Health Services | 1,000 | 1.9% |
| Leisure and Hospitality | 1,000 | 2.4% |
| Professional and Business Services | 900 | 2.3% |
| Trade, Transportation, and Utilities | 700 | 1.0% |
| Mining, Logging, and Construction | 600 | 3.6% |
| Other Services | 300 | 3.0% |
| Financial Activities | 0 | 0.0% |
| Information | -200 | -2.9% |
| Manufacturing | -300 | -1.7% |
Eaton Corp has announced a $150 million investment to build a second facility and boost capacity at its existing manufacturing plant. This expansion aims to enhance production capabilities.
The Sunset Amphitheater project is anticipated to generate over $5.4 billion in economic impact for El Paso and is expected to support more than 2,000 direct and indirect jobs.
The project consists of a new 6-story, 492,000-square-foot ambulatory care facility on the William Beamont Army Medical Center campus.
As of September 2024, El Paso’s apartment market remains robust, with an occupancy rate above 95% and demand outpacing supply, distinguishing it from other Texas markets where supply has surpassed demand by a wide margin. Annual rent growth, currently at 2.4%, is forecasted to increase to 3.1% in the coming year, outpacing the national average. This growth is supported by El Paso’s strategic position as a major logistics hub, bolstered by Fort Bliss and the University of Texas at El Paso, and enhanced by a series of substantial economic development projects.
Notably, Eaton Corp’s $150 million investment in a new 115,000-square-foot facility will bring 600 skilled jobs to the area, adding to the industrial base and fostering demand for housing among a growing workforce. The Sunset Amphitheater Project, with an anticipated $5.4 billion economic impact over 20 years, will further strengthen El Paso’s economy by attracting tourism and supporting over 2,000 jobs in entertainment and service sectors. Additionally, the VA Health Care Project brings a $700 million, 492,000-square-foot ambulatory care facility to the region by 2028, expanding healthcare access and employment opportunities, and increasing demand for housing near medical facilities.
El Paso’s unique role as a transnational urban center serving a vast cross-border population reinforces its position for sustained multifamily market growth and enhances the city’s appeal to investors seeking long-term opportunities in the rental market.
Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics
