Spending, job growth and home sales continue to fuel the local economy, which in June moved deeper into record territory, according to the Greater Waco Economic Index prepared by Amarillo-based economist Karr Ingham.
He said Waco showed “impressive growth” during the first half of 2015 compared to the first six months of 2014.
“There is much to celebrate in terms of the city’s economic performance in 2015, and in fact over the last 4.5 years,” he wrote in his report released this week. “And while rates of growth will almost certainly begin to moderate at some point, there is little to suggest that the current growth trend will not continue for the balance of 2015 and on into 2016.”
Raw figures show the index hit 120.1 in June, up from 119.6 in May and 112.6 in June of last year. Ingham uses data dating back to 2000 to create an economic snapshot of the Waco area sponsored by the First National Bank of Central Texas and the Tribune-Herald.
Waco residents and those visiting the community continue to dig deeply into their pockets. Real taxable spending per June sales tax receipts was up by 3.2 percent compared to June of last year, which in turn was up 10 percent from the previous year.
For the year to date through June, spending reached $1.2 billion, a 3.5 percent jump compared to 2014.
Cities for which sales tax figures are analyzed include Waco and the suburbs of Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway, according to the report.
Employment growth remains a strength, as 1,300 jobs were created between June of last year and this year.
But Ingham cautioned that the uptick slowed to just over 1 percent in the second quarter after averaging 2.5 percent year-over-year during the first quarter. The June jobless rate of 4.3 percent was the lowest for the month since 3.8 percent in June 1999.
The public continues to enjoy visits to Waco’s “Motor Mile” and other locales that boast that new-car smell.
Through June, buyers spent more than a quarter of a billion dollars — $252 million, to be exact — on new and used vehicles. That’s a modest 2.4 percent more than during the first six months of last year. But Ingham put that in perspective by noting that sales through June of 2014 were up by nearly 10 percent from the first six months of the prior year.
Commercial and industrial construction in Waco continued to fare well during the first six months. Building permit valuation was down a slight 2.4 percent compared to a year ago, but still was the third-best on record.
For the past two years, Ingham said, Waco has seen an explosion of retail development. New stores such as Five Below, World Market, Haverty’s and a Cavender’s Boot City superstore have opened in Central Texas Marketplace, where a new La-Z-Boy outlet is scheduled to open in late August. Lake Air at Valley Mills Drive has seen the opening last week of a new Whataburger restaurant and the promise of a new Sprint store and an Uncle Maddio’s Pizza Joint in coming months.
On the Interstate 35 frontage road near downtown, land has been cleared for a new CVS Pharmacy and an In-N-Out Burger emporium. Meanwhile, only blocks away, land has been cleared for a Freddy’s Frozen Custard and Steakburgers. Progress continues on a new Saltgrass restaurant at Legends Crossing, where a new hotel and apartment complexes also are rising.
Home construction is abuzz, as permits for 224 new homes were issued during the first six months of the year. The 110 issued during the second quarter, between April and June, is the highest since the second quarter of 2008.
Waco custom homebuilder Steve Sorrells said he heard at the recent SunBelt Builders Show sponsored by the Texas Association of Builders that contractors around the state are enjoying robust demand for homes.
Finding quality labor
“We’re starting to see larger homes coming back, which is good for our business,” Sorrells said. “We’re also seeing a little bit of tightness in lot inventory and it’s getting tougher to find quality labor, which could drive up the cost of new homes.”
“Activity in the Waco residential real estate market is at record levels by every measure and continues to heat up,” Ingham wrote in his report.
The number of closed sales during the second quarter (781) and the first six months (1,352) are the most ever.
Camille Johnson, a residential sales specialist at Coldwell Banker Jim Stewart Realtors, said, “This is the best market I’ve ever experienced, and I’ve been doing this for 30 years.”
She said demand for homes in the $150,000 to $250,000 range is especially impressive, while those priced above and below those numbers are holding their own.
“Hospitals are hiring; Baylor is hiring; and good companies like Caterpillar are hiring,” said Johnson, commenting on demand for homes. “Our economy has never been based on one single thing, and everything it does rely upon seems to be healthy. The city and the Greater Waco Chamber of Commerce do such a good job of promoting Waco. A lot of people who used to not pick Waco pick it now.”
Demand, of course, impacts price. And the average sales price for a home during the second quarter stood at $174,435, which is 15.5 percent higher than the $150,979 during the second quarter of last year, Ingham reported.
“The total dollar volume of residential real estate activity, adjusted for inflation, is thus growing by leaps and bounds in 2015, with the June monthly total up by 14 percent, the second quarter total up by over 22 percent, and the total for the year-to-date posting a 27 percent increase compared to the first six months of 2014,” Ingham said.