Local consumers in August continued to scratch their itch to spend, shelling out money in stores, hotels and car lots and to buy homes, according to a snapshot of local trends released by Amarillo-based economist Karr Ingham.
Spending likely is tied to improving employment numbers, Ingham said. The number of people employed in the Waco Metropolitan Statistical Area, which includes Marlin and McLennan counties, rose by about 800 during the past 12 months, he said.
The employment rate in August slipped to 4.1 percent, down from 5.5 percent a year earlier.
Applying figures dating back to the base year of 2000, Ingham determined that the Greater Waco Economic Index reached 120.9 in August, up from the revised figure of 120.4 in July and 113.7 in August of last year.
“For the year to date through August, real spending for the entire metro area is up by an impressive 4.8 percent compared to the January-August 2014 total,” Ingham wrote in his report, which is sponsored by the First National Bank of Central Texas and the Tribune Herald, and whose findings are presented during a meeting of business leaders at the bank.
Employment has reached record territory, but Ingham cautioned that the rate of growth is “languishing.” The year-over-year uptick of only seven-tenths of 1 percent placed the Waco MSA 20th among the 26 metro areas in the state.
But Whitney Richter, business development and marketing manager for the Greater Waco Chamber of Commerce, advised against reading too much into Greater Waco’s employment growth, or lack thereof, until Ingham releases a report for September.
“I believe we will see the labor force up again as students get back into the marketplace,” she said. “Obviously, we’ve seen a lot of growth in the retail and restaurant industries, and I’ve not heard about any difficulty hiring people.”
That new and nearly-new car smell continues to charm local residents. Spending on such vehicles in August revved ahead of last year’s pace by 17 percent, reaching more than $50 million for the month.
Billy Martin, who oversees Fiat sales locally for the Allen Samuels-branded auto group, said car dealers locally and nationally continue to pull out of the collapse of the auto industry in 2008 and 2009, when a souring economy kept buyers away from showrooms in droves. Pent-up demand blossomed and now is coming to fruition with increased sales.
He said vehicle sales dropped to 11 million a year during the recession, but are on course to reach 17.5 million.
“This sector of the Waco economy has expanded steadily and dramatically since the downturn of 2009, and this marks the sixth straight year of strong growth since then,” said Ingham, adding that sales through August are up 5.3 percent from 2014.
Jeff Hanna, used car sales manager at Marstaller Motors, said the automotive industry in recent years “has been on a wild ride,” and he thinks increased trade locally is because of a growing population with money to spend.
“Look at the housing industry,” he said. “It is growing, too, probably for the same reason.”
Ingham said the sale of existing homes continued to swell at an “impressive” pace in August, with 268 houses changing hands. That compares with 230 homes sold in August last year and the 210 sold in August of 2000.
Kathy Schroeder, vice president for residential services at Coldwell Banker Jim Stewart Realtors, said the national recession has passed, husbands and wives are working again, and the public feels more comfortable about their economic future.
‘Things have changed’
“Three years ago, it was still a little scary to buy a home, but things have changed,” Schroeder said, adding that a well-priced home in an attractive area of Greater Waco can sell within a few days to a month.
“If a home has a unique feature, we’ve seen sales close in a matter of hours,” she said. “That was true for a home in Robinson on 2.5 acres. It had a fountain and was priced at about $350,000, and it sold well before the end of the day it was listed.”
Schroeder said home sales typically wane when the weather cools and the holidays approach, “but I’m not sure that’s going to happen this year. Sales began the year strong and have continued through September.”
Schroeder said Waco is attracting retirees looking for communities with a low cost of living, as well as fans of the HGTV “Fixer Upper” television show featuring local residents Chip and Joanna Gaines, who remodel homes and showcase the local housing market.
The August average sales price of $159,224 for an existing home was down slightly from August of 2014, but the average price of $165,086 for the year through August is 10 percent higher than that of last year.
Only 16 building permits to build new homes were issued in August, a decline from the 21 in August last year. But year to date through August, the total reached 258, well ahead of the 227 recorded through August of 2014.
Tax receipts on hotel/motel occupancy through August jumped to $1.78 million, compared to $1.58 million last year.
Liz Taylor, who oversees the Waco Convention and Visitors Bureau, said the growing number of activities at the Extraco Special Events Center and Baylor University’s McLane Stadium is attracting more visitors who are staying longer.
Waco Mayor Malcolm Duncan Jr., who attended Tuesday’s briefing on Ingham’s report, was asked about the decision by Waco City Council to allocate $35 million in downtown Tax Increment Financing money to support the $266 million stadium.
“It’s the best decision we’ve ever made,” said Duncan of the largest economic development incentive Waco ever has offered.