Corporate-owned properties can inflate El Paso County housing market

EL PASO COUNTY, Colo. (KRDO) -- A majority of homes in El Paso County are owned by the individuals that live there, but it’s the properties owned by corporations that can inflate the market.

According to the latest data from the U.S. Census Bureau, 65.9% of housing units are occupied by the individual owner. The El Paso County Assessor Mark Flutcher said the remaining properties, which are mostly owned by corporations or LLCs, can sway a market.

“It tended to push (the market) up more, because they had the means to pay above market based on their portfolio, their analysis of their investment, whereas individual home buyers had to scrutinize the deal a little more,” Flutcher said.

However, Flutcher said the number of properties owned by corporations has slowed and the owner-occupied housing rate has remained steady at about 65% for the last couple of years.

“There definitely was a period when companies were buying up a lot of homes sight unseen as investment properties,” he said. “But I think with the higher interest rates and the slowing of the market, those companies are being a little more careful in how they spend their money.”

According to housing websites like Realtor.com and Redfin, the average listing home price in El Paso County for October 2023 was about $490,000 — a 2% increase from last year.

This trend aligns with national averages. According to the National Association of Realtors, median home prices have increased each year since 2011 and soared during the pandemic. The national median home price in 2019 is just 69% of what it is today.

Mortgage rates are also high. According to Freddie Mac, the 30-year mortgage rate is at 7.29%, as of Wednesday. This is the highest rate since 2002.

The rising prices and mortgage rates have caused a decline in houses sold. The National Association of Realtors said home sales in October this year were 15% less than last year — the eighth consecutive month sales have declined. Home sales for 2023 are on pace to be the lowest since 2010.

Flutcher said corporate ownerships also affect commercial properties. He said large corporations like McDonald’s can pay more for land purchases than a local, small business, often pushing them out of the market.

“McDonald's can pay a lot more for a commercial lot to build their restaurant on than a mom and pop Italian restaurant where that's their life savings going into it,” Flutcher said. “McDonald's will pay way above what somebody else might pay for that lot.”