Esperanza Homes from its base in upper Hidalgo County moved into the Brownsville market in recent years. It skipped over the Mid-Valley but it was a short-lived omission.

Esperanza, a division of Rhodes Enterprises, had designs on the Mid-Valley all along. It established on paper a Mid-Valley division in 2020, which in Esperanza’s case, runs from San Juan to Weslaco. The company moved this year to break ground on Texas Heights in Weslaco and Sioux Coves in San Juan.

“We look at population density, land availability, affordability and demographics,” said Shant Samtani, the vice president of sales for Esperanza Homes. “We looked at all of those factors and we could see there’s definitely a need for single-home development in Weslaco and the Mid-Valley.”

Recognizing Mid-Valley Potential

Oscar Zarate assessed the same sort of factors and the Mercedes-based builder saw his community and La Feria as the heart of the Rio Grande Valley cities with lots of open land and ready access to Expressway 83 for commuters. McAllen, Pharr and other upper Valley communities are filled with developments and crowded space along the expressway, he said. Mercedes on east to La Feria and Harlingen will be a new hot zone for developers and builders, Zarate said. 

“We’re seeing everything coming this way,” said Zarate, who owns Zarate Homes & Designs. “There are people who have wanted to live in Mercedes because it’s the midpoint to everything, but there were no lots available. We’re addressing that right now.”

In July, Zarate broke ground on Valley Ranch Estates on Mile 1 E Road. The 185-lot development is less than a mile from the expressway and in close proximity to the Rio Grande Valley Premium Outlets. Then in August, Zarate held a groundbreaking for a 121-residential Main Street lot development in La Feria, the Brooks Estate Subdivision.

Both Esperanza Homes and Zarate Homes see a Mid-Valley area whose time has come to experience the kind of developments commonly found in McAllen and Brownsville.

“Open land, location and access to the expressway are key factors,” Zarate said. “The Mid-Valley has all three.”

Open Land & Opportunities

It’s open land for now behind the sales office trailer on north Texas Boulevard in Weslaco. 

Dirt has been moved and shifted in preparation for the formation of lots at Texas Heights. Samtani and his sales staff sit in their company trailer where prospective buyers are already coming in to ask questions and seek information. Texas Heights will eventually be a residential community with well over 100 homes.

Samanti explained the methodology of Rhodes Enterprises, the developers of Tres Lagos in McAllen, which guides the building goals of Esperanza Homes. Starting this fall, Samanti and his staff will seek to start the construction of four homes per month, with home prices starting in the $190,000 range. It would start a total of 96 homes under construction in a year. 

The challenges in reaching those goals will come more from convincing potential customers to leave existing homes than dealing with competitors, Samanti said. Used home inventory is scarce nationwide as markets recalibrate. Homeowners tended to stay put given recent uncertainties, so the churn of existing homes being put up for sale slowed greatly.

“The biggest competition we have right now is a buyer’s existing home,” Samanti said. “It’s convincing them to leave and move into a new home. You look at a market like the Mid-Valley and there has been a huge shortage of new homes being built.”

Spillover Growth

Builders like Esperanza and Zarate Homes are moving rapidly to fill that new home construction void in the Mid-Valley.

Zarate in Mercedes is as enthusiastic in seeing the opportunities as is Samanti in Weslaco. Zarate will offer substantial discounts on lot purchases at his Mercedes development for buyers who work in the health care and law enforcement fields, as well as military families. 

“I’m working with the city of Mercedes to drive growth here and attract more anchor tenants,” Zapata said of retail. “Retailers and investors look for rooftops. I’m trying to work collaboratively for growth and economic development that will help everyone.”

The end result, Zapata said, is smaller Valley communities benefiting from the focused efforts home builders are now giving the Mid-Valley.

“These more rural smaller communities have so much potential,” he said. “We’re seeing spillover from McAllen. I know we’re going to do really well in Mercedes.”