The Waco housing market continues to percolate, with more than 2,000 homes sold and permits secured to build more than 400 through August, according to a monthly snapshot of local economic trends prepared by an Amarillo economist.
“The 407 new single-family residence construction permits issued in the first eight months of the year is a record, surpassing 400 through August for the first time ever, and outpacing the permit total through August 2018 by 3%,” economist Karr Ingham wrote in summarizing his August findings.
Ingham prepares the monthly Greater Waco Economic Index under contract with the First National Bank of Central Texas and the Tribune-Herald. He applies data dating to the year 2000 to track trends including home construction and sales, general construction, employment and spending.
He assigns a score to his compilation, and this week reported the GWEI hit a record 132.0 in August, up from 131.2 in July, which was revised downward because of updated information on vehicle sales. The previous record raw score of 131.3 was set in May this year, Ingham said in his summary.
In August, 337 homes changed hands, said Ingham. His tracking of Multiple Listing Service information revealed that sales totals in August were the highest ever for any month. Home sales through eight months are outpacing those last year through August by 10%, Ingham reported.
Elsewhere in the GWEI, positives were the norm in employment growth, auto sales activity, hotel revenue and general construction. Retail spending through August increased a tepid 1.4% versus the same period last year.
Real estate deals
Local real estate agents told the Tribune-Herald deals remain ripe for the picking, that properly priced properties sell in a timely fashion, but a couple sensed what they described as a “stabilizing” of local selling as summer has transitioned to fall, school classes have begun and the holidays beckon.
Ingham hinted at such a trend, saying price increases common earlier in the year have moderated, though the $216,598 average year-to-date and the $219,571 norm in August reflected 7% and 3.6% increases, respectively.
Mario Gonzalez, a Waco native and residential specialist with Coldwell Banker Apex, said he has no complaints about the market, having had a hand in selling 51 homes this year, but he said inventory shortages concern him.
“Here’s the biggest thing. There are still not enough homes in the $100,000 to $200,000 price point. We can’t keep enough on the market,” Gonzalez said. “There are buyers for those homes, and for those on up to $250,000, who have been looking many, many months. Some would-be buyers are not nearly as picky as they used to be, they are more relaxed about their requirements, and they still can’t find what they are looking for.”
Gonzalez, 33, said he is amazed at how popular scattered neighborhoods are becoming, the area around North 20th Street and Waco Drive and the Antioch Community Church complex among them. He said homes in that area are fetching buyers at asking prices “that I would have never dreamed possible.”
Ashley Jessen, with Coldwell Banker Apex, said she is seeing keen interest from investors wanting to acquire properties near Baylor University. Some are parents, and they are snapping up homes ranging from $55,000 to hundreds of thousands, with plans to “flip them” for profit or to make minor renovations and lease them to students, Jessen said.
Ken Willits, 67, moved to Waco from Los Angeles hoping to retire after watching episodes of Chip and Joanna Gaines’ “Fixer Upper” hit television show. But he has continued his real estate career with Keller Williams locally and said he is brokering sales of homes priced at $80,000 to $400,000.
“People stay put longer in Waco,” Willits said. “It’s surprising the number of people who have lived in their home 30, 40 or 50 years. In Los Angeles, there is constant turnover. Buyers there are more sophisticated, but you get more home for your money here — and my hometown has gone downhill.”
Ingham reported that auto sales surpassed $60 million at local dealerships in August, besting that figure for the first time in history. Still, year-to-date, inflation-adjusted auto spending remains 1.2% less than last year.
Visitors to Waco continue to contribute to its economic vitality. Hotel and motel revenues through August topped $44 million, a 5.2% increase from the same period last year. The increase was 2.6% in August alone.
General construction activity rebounded in August after two months in the doldrums, posting an 11.5% year-over-year increase. To date, projects valued at $238 million have been permitted, a 9.4% increase.
The local economy created 1,200 jobs the past year, and the year-over-year employment growth rate stood at exactly 1%, tying Waco at 11th among the 26 metropolitan statistical areas around the state. The jobless rate continues to fall, pegging 3.5% in August, a record low for the month.
Inflation-adjusted spending remains mediocre, coming in at 1.4% below that through August last year, Ingham reported. The cities for which sales tax is analyzed include Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Woodway.
Bottom line, housing remains the story, Ingham said.
“The Waco housing market has been in a cycle of expansion since 2011, and that impressive trend continues thus far in 2019,” he wrote.