Every economic indicator in the Greater Waco Economic Index improved in October compared to the same month last year, but home construction and home sales remain the star of the show, local business leaders learned Thursday.
“Green is good, red is bad,” said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce, referring to her color-coded chart as she discussed the index prepared by Amarillo-based economist Karr Ingham.
Every category was green, reflecting positives in everything from retail sales and auto purchases to general construction, the jobless rate and hotel-motel occupancy. The GWEI raw score hit 133.5 in October, up from 132.5 a year earlier, according to Ingham’s summary. He tracks data dating to 2000 in preparing his monthly snapshot under contract with the First National Bank of Central Texas and the Waco Tribune-Herald.
Home construction continues at a breakneck, record-setting pace.
Cooler weather typically silences work in housing subdivisions under development. But Waco issued 84 permits to build single-family homes in October, a 200% increase from the 28 it issued in October last year.
The city issued 556 permits through October, a 17.5% jump. Through October in 2000, Waco had issued 167 permits to build homes.
National and regional homebuilding companies, including Texas-based D.R. Horton, continue to make waves locally. D.R. Horton almost monthly secures permits to build in the 1,500-home Park Meadows subdivision taking shape in far West Waco.
LuAnne Butler, director of construction and design at longtime local builder Woody Butler Homes, said the company and other contractors based locally also continue to prosper from a hot housing market. She said Woody Butler Homes poured 35 slabs this year on which to place residences.
“Finding tradespeople, plumbers and electricians, for example, remains a challenge,” Butler said.
She said changes in city of Waco building codes aimed at improving energy efficiency have raised home construction costs.
Sales of existing homes reached 246 in October, a nearly 8.9% increase from last year. Ingham reports 2,670 single-family homes were sold during the first 10 months this year, a 7.9% increase.
More than a thousand fewer homes were sold through October 2000, Ingham’s base year. That year’s 10-month total was 1,619.
The average home selling price in October was $238,497, a 15% increase from the $207,466 in the same month last year.
“The residential real estate sector has led the way in terms of economic expansion in the metro area and the Greater Waco Economic Index all year long, and that continues to be the case, with the aid of sharp increases in other index components as well,” Ingham said in his summary.
Retail spending reached $306 million in October, a “respectable” 2.8% increase from a year earlier. Spending for the year remains sluggish, showing an improvement of well under 1%. Ingham wrote that sustained growth “has been hard to come by.” Collins, meanwhile, said Waco appears to be performing better in this category than its neighbors. Ingham also analyzes sales tax rebates for Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway, according to his summary.
The local economy created 1,800 jobs in the past year, a growth rate of 1.5%, placing Waco 10th among the 26 Metropolitan Statistical Areas in Texas. San Antonio’s 3.4% rate of job growth tops the list, Ingham said.
Auto sales topped $60 million in October, a new record for the month. Hotel revenue topped $4.9 million, a 2.2% year-over-year increase. Permits issued for construction of commercial, industrial and other nonresidential buildings totaled $33.8 million, a nearly 30% increase from October 2018. Last year and 2017 were particularly sluggish in this category, Ingham said. This year through October, permit values have seen a 17% increase.
During Thursday’s presentation of GWEI results, several invited business leaders commented on what they are seeing in the local economy.
Jake Roye, who owns the Chick-fil-A restaurants in Richland Mall and at Franklin Avenue near New Road, said sales are the best they have been since he opened for business in 1996. He said he believes he is picking up Interstate 35 customers who are taking new routes through town to avoid the $341 million widening of the interstate along restaurant row near downtown.
Roye said traffic around the Franklin Avenue shop has created a challenge to keep the drive-thru lane running smoothly while customers navigate the entrances to nearby Walmart. He said he has used a drone to monitor traffic patterns from above.
Roye said the Chick-fil-A at Seventh Street and Interstate 35, which is owned by another franchisee and colleague, David Sykora, has seen sales level off as construction rages near its drive-thru lane. The restaurant, which opened in 2014, had enjoyed tremendous growth as Magnolia Market at the Silos has become a tourist draw.
PALS Home Health, which provides in-home pediatric care in 52 Texas counties, including McLennan, continues to grow, manager of local operations Tyler Martin said. PALS has hired between 30 and 40 nurses in the past six months and is always taking applications, Martin said. It remains a challenge to fill positions requiring nursing skills, he said.