People continue to dig deeply into their purses and wallets, and a record number of existing homes were sold during the third quarter of this year, pushing the Greater Waco Economic Index upward in September.
On the flip side, permits issued to build new homes plummeted between July and September, Amarillo-based economist Karr Ingham said in a report released this week for the First National Bank of Central Texas and the Waco Tribune-Herald.
Several local business leaders heard details of the report during a question-and-answer session Wednesday.
The bottom line is the index settled in at 121.1 in September, up from 121 in August and from 114.3 in September last year.
Ingham uses data dating back to the year 2000 to prepare his snapshot of the local economy.
Spending in the Waco area had reached $1.8 billion through September of this year, as consumers have been treated to more dining and retail options with the opening of new restaurants such as Saltgrass Steakhouse and Twisted Root Burger.
Saltgrass recently opened in the upscale development called Legends Crossing on West Loop 340 near Interstate 35. It is attracting such nice crowds that its corporate parent, Landry’s Inc., already is considering placing another dining concept in Legends Crossing, said Jimmy Banks and Lisa Monroe, who market the 158-acre site as owners of the Triliji Group real estate firm.
Banks, who attended Wednesday’s discussion of economic trends in Waco, said he could not yet divulge the Landry’s brand that could follow Saltgrass to Waco. Landry’s also is the parent of Landry’s Seafood, Bubba Gump Shrimp, Chart House, Rainforest Cafe, Morton’s The Steakhouse, Mitchell’s Fish House and Rusty Pelican, according to the company’s website.
Spending on new and used cars and trucks continues at a breakneck pace, with sales up nearly 10 percent for the month and 12 percent in the third quarter compared to the same period during 2014, according to Ingham’s report.
Ted Teague, general manager of the Allen Samuels Dodge Chrysler Jeep Ram Fiat dealership on West Loop 340, said consumers are feeling better about the economy in general and are no longer afraid to spend on big-ticket items.
Falling gasoline prices also help because they provide consumers with more disposable income.
“Business is good, and the automobile industry is strong,” Teague said. “We’re up 10 percent in sales, and we’ll probably end the year with 2,750 transactions. Applying our rate of growth, we’ll likely sell more than 3,000 next year.”
He said industry experts are predicting that December “will prove to be the best month ever in retail car sales.”
Spending has ties to employment, and more people are finding jobs in Greater Waco, Ingham said, though job growth stagnated in the third quarter to a 1.1 percent rate. That is down from 2.5 percent and 1.3 percent in the first and second quarters, respectively.
The Waco Metropolitan Statistical Area, which includes McLennan and Falls counties, saw the addition of 1,500 jobs between September of last year and this year. Of that total, about 1,300 jobs were added in two employment categories: professional and business services, and leisure and hospitality, which includes the lodging and restaurant industries.
The third-quarter jobless rate hit 4.2 percent, which is well below the 5.5 percent from the third quarter of 2014.
Whitney Richter, business development and marketing manager at the Greater Waco Chamber of Commerce, said a falling jobless rate typically benefits the community, but if it falls much further, the availability of qualified employees could suffer.
Richter said industrial prospects considering Waco need to know they can fill their personnel needs.
On that note, Matt Meadors, president of the Greater Waco Chamber of Commerce, said the chamber’s project pipeline “is incredibly strong,” and that a couple of impressive announcements could take place before year’s end.
The residential real estate market locally continues to purr, with 775 homes sold during the third quarter, a 9.8 percent increase from the 706 sold during the July-September period in 2014, Ingham said. Sales for the year through September reached 2,127, an 11.9 percent increase over the 1,901 during the first nine months of 2014, he said.
But contractors for much of this year have been slow to secure permits for construction of new homes. Ingham said the city of Waco issued only 27 permits in September and 61 during the third quarter, drops of 41 percent and 38 percent, respectively.
For the year, the story is a little better, with 285 permits issued compared to 273 a year earlier.
In September, the average sales price for a home in Greater Waco stood at $163,416, up from $148,312 in September 2014.
“The current cycle of growth in the greater Waco metro area economy has thus far lasted 44 months, and certainly remains in place even though the index increase was minimal from August to September,” Ingham said.
“The economy has performed impressively in the first nine months of the year, and there is little reason to suspect at this point that the trend will not continue through the end of the year and beyond.”