The third quarter was not kind to the Waco economy, which turned sluggish in the areas of employment, construction and auto sales, according to report from Amarillo-based economist Karr Ingham.
Strong showings in the areas of spending and home sales prevented further damage to the Greater Waco Economic Index, which Ingham prepares for the First National Bank of Central Texas and the Tribune-Herald using data on job growth, spending and construction dating to 2000.
Raw numbers produced by Ingham show the index improved to 125.3 in September, up from 125.2 in August and 124.8 in September last year.
“The index remains in positive year-over-year territory, but the gap has been narrowing since early in the year,” Ingham wrote. “The February 2017 index was up by 3.4 percent year-over-year, and that rate of growth has narrowed to a skinny 0.4 percent in September.”
Growth has slumped since the all-time high of 125.5 in June, he wrote.
Still, the report has a silver lining in selected areas. The city of Waco issued 32 permits in September to build single-family homes, down from 36 in September last year. It also saw a decline during the third quarter. But year-to-date, permits are outpacing January-through-September totals last year by a count of 373 to 316, according to Ingham’s report.
“Park Meadows has a lot to do with that,” said Scott Bland, a local builder and president of the Heart of Texas Builders Association, referencing the 1,500-home subdivision on Ritchie Road in the Waco city limits “that is blowing and going” under D.R. Horton and Stylecraft builders.
“Several subdivisions are scheduled to go online the next six months, which is great because contractors will have more places to build,” Bland said. “But any delays going forward likely will be labor-related. There remains a shortage of manpower. During the recession we just came out of, tradesmen left or moved on to something else and have not returned.”
Bland said he just returned from a conference in San Antonio hosted by the Texas Workforce Commission that focused on adult unemployment and how to recruit older workers to the building trades.
Existing home sales locally reached 252 in September, up from 242 the same month last year. But sales declined 1.8 percent for the third quarter and year-to-date sales slipped from 2,141 last year to 2,095 this year.
“The numbers may be down a little, but we’ve had a lack of inventory for quite some time, and that situation is improving,” said Trish Griffin, a residential specialist with Kelly Realtors and a 17-year veteran of selling homes. “I would say the last three years have been the best housing market I’ve seen. I got into this business when things were good, and I rode out the bad times that arrived in 2008-2009.
“Right now, demand for homes priced $100,000 to $200,000 is great, but I’m selling homes priced at $100,000 to $1 million.”
Despite the slip in home sales, Ingham said the Greater Waco metro area is setting records in terms of “aggregate residential market activity.”
“The total inflation-adjusted dollar volume of home sales activity is up by about 4 percent compared to year-ago levels, and the monthly and third-quarter totals are records as well,” Ingham said, referring to the total value of the sales, not the number of homes sold.
The average price for an existing home sold locally in September was $222,389, about 22 percent more than the $182,244 average in September of last year, according to Ingham.
Year-to-date, the dollar volume of home sales totals $413 million, which is almost 4 percent more than the total through nine months last year.
Retail spending has sagged during much of 2017, but it rose 3.2 percent in September. For the year, it totals $2.59 billion, a fractional increase from the $2.57 billion through September last year.
The cities for which sales tax is aggregated and analyzed include Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway, Ingham said.
The Waco Metropolitan Statistical Area, which includes McLennan and Falls counties, has seen a 900-job decline in total employment from last year, according to monthly employment estimates from the Texas Workforce Commission, which Ingham cited in his report.
Auto sales apparently have hit the brakes, dropping in both August and September after booming earlier in the year and last year. Revenues garnered by local lodging establishments continue their upward path, totaling $13.9 million for the quarter, a 9 percent increase.
General construction of buildings not for residential use has ground to a halt, Ingham said. The value of permits issued during the third quarter “is the lowest quarterly valuation since the fourth quarter 2013.”
“Again, the Greater Waco Economic Index is very near its all-time record, meaning the general economy of the metro area continues to operate at a generally high level,” Ingham wrote. “But the rate of growth in the overall economy has slowed in 2017 and flattened for real in the third quarter.”
Ingham said this is a “temporary cooling,” and no cause for alarm.