Home sales and new construction of homes gave the Greater Waco Economic Index a jolt in April, sending it into record territory and eclipsing showings in March and in April of last year, according to a report released Wednesday by Amarillo-based economist Karr Ingham.
The index rose to 119.2 last month, up a “stout” 5.7 percent from the April 2014 index of 112.7, Ingham said.
He said “every single component used to calculate the index was improved for both the month and year-to-date through April compared to year-ago levels.”
Ingham prepares the report on behalf of the First National Bank of Central Texas and the Tribune-Herald.
Permits the city of Waco issued to build new homes reached 45 in April, more than double the 22 a year earlier. Meanwhile, the number of existing homes sold in April hit 237, which is 8.2 percent more than in the same month last year. Through April, a total of 808 existing homes had changed hands.
Real estate agent Cristi McGowan, owner of Waco Home Team powered by Re-Max Cen-Tex Realtors, said the positive numbers hold true at her agency.
“A lot of homes in great condition in good neighborhoods get sold before the sign gets in the yard,” said McGowan, adding that agents frequently use social media to spread the word about a home poised to become available. “Ten days on the market in some cases is kind of long these days.”
Discussing the red-hot housing scene, she said, “People are moving to Texas by the thousands, and Waco has become very attractive with its location on Interstate 35, the investments going on downtown, the new Baylor stadium. We’re an attractive-sized town for people hunting for jobs and for those downsizing and retiring.”
She said houses priced between $250,000 and $400,000 are especially popular, especially with professionals and retirees.
McGowan said she thinks the market can sustain this pace through year’s end, as interest rates are predicted to stay low through summer.
“And I don’t think construction in the new housing market can keep up with demand in the foreseeable future,” she said.
The monthly average sales price for an existing home soared to more than $170,000 in April, easily a record for April or any other month, Ingham said.
Sharon Jones, executive director of the Waco Association of Realtors, said it is not unusual for those selling homes priced between $150,000 and $225,000 to receive multiple offers and to eventually sell for more than their original listing price. She said the bidding “is making it a little tough on first-time homebuyers” who may have a limited budget.
Jones said the real estate field has become so attractive that 25 new agents joined the association Wednesday.
Woody Butler, owner of Woody Butler Homes and president of the Heart of Texas Builders Association, said the weather is wreaking havoc on homebuilders.
“The interest level in our homes is high, and we’re getting a lot of traffic at our model homes on the weekends. But we’re at the mercy of the rain,” Butler said. “I’m told there have been only four days in May that it hasn’t rained, and even if you have a permit in hand, you can’t start a new home with all the rain and mud.”
He said home construction even could lag when the weather warms during the summer, as builders trying to make up for lost time compete for subcontractors.
“It may prove very difficult to find subs when we’re moving forward and picking up the pace when the weather is getting to the point we were wishing it would rain again,” he said.
Elsewhere in Ingham’s report, employment and spending are among the categories continuing to gain steam.
Ingham and the U.S. Department of Labor says the Greater Waco economy created about 1,500 jobs over the 12 months ending in April. The Texas Workforce Commission and Ingham, meanwhile, said the jobless rate fell to 3.7 percent in April, down from 4.6 percent a year earlier.
Retail spending reached nearly $800 million through April, a 3.4 percent increase over the first four months last year, which were 5.6 percent higher than in 2013. Cities for which sales tax is analyzed include Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway.
Local lodging establishments enjoyed a 47 percent increase in hotel-motel tax receipts in April over last year, collecting a total of $241,313.
“Baylor’s new McLane Stadium represents a new venue for hosting completely new events, and you have to give some credit for the increase to that,” said Liz Taylor, director of Waco’s Convention and Visitors Bureau. “We were also busy here at the convention center. Blend the two, and you have a positive outcome.”
Auto sales returned to positive year-over-year growth in April, with inflation-adjusted spending on new and used automobiles up by more than 12 percent compared to the April 2014 totals, which were up nearly 11 percent from the previous year, Ingham wrote in his report.
During a round-table discussion of the report attended by several local business leaders, the talk turned to the deadly shootout at the Twin Peaks restaurant at Central Texas Marketplace that left nine bikers dead and 18 wounded, and has led to the permanent closing of the establishment.
“Twin Peaks was our largest beer customer from the first day they opened” in late summer of last year, said David Floyd, branch manager for Glazer’s Distributing in Waco, a wholesaler of beer, wine and spirits.
Meanwhile, Kyle Citrano, president of the Waco Restaurant Association who operates George’s Restaurant & Bar in Westrock Centre on Hewitt Drive, said he considers the shootout an “isolated incident” that should not harm Waco’s image or that of the local restaurant industry.