Apparently several high-priced homes changed hands in January, even before Chip and Joanna Gaines bought the historic Cottonland Castle, because the average price of a residence sold in Greater Waco jumped 36 percent from the same month last year, according to a report by a West Texas economist.
Home sales “soared” in January, with deals consummated on 173 addresses, a 30 percent increase from January 2018, said Karr Ingham, of Amarillo, who prepares a monthly overview of local economic trends for the First National Bank of Central Texas and the Tribune-Herald. He uses data derived in 2000 to track employment, construction, spending and lodging stays.
January’s raw Greater Waco Economic Index score totaled 130.5, up from 130.3 in December but down from the record 130.7 in November.
“Since January 2012, when we bottomed out after the national recession, we have seen 84 months of economic growth,” said Kris Collins, senior vice president of economic development for the Greater Waco Chamber of Commerce.
She presented highlights of Ingham’s report during a meeting Thursday of invited business leaders at the bank’s Valley Mills Drive location.
The average price of a home sold in January reached $212,455, dwarfing the $156,163 a year earlier. Ingham said the price seems out of balance.
“This suggests some large transactions during the month,” Ingham said.
The dollar volume of home sales totaled $36.7 million in January, a hefty 72 percent more than the $21.2 million in January last year. That is attributable to increases in both the number and price of homes sold, according to the report, which Ingham released in early March instead of late February.
Waco real estate agent Ashton Gustafson, owner and broker of AG Real Estate & Associates, weighed in this week with February totals gleaned from the Waco Multiple Listing Service. Gustafson said the average list price in February was $205,285, the average sales price was $199,725, and 198 single-family homes sold. The average price per square foot was $99.98, up from $95.20 in February 2018, and total dollar volume reached $39.5 million.
“The cost of construction is simply higher than years prior and will continue to climb, and we are seeing a lot of quality remodeling in older homes, which is gradually bringing their values up,” Gustafson said in an email response to a request to elaborate on rising home prices.
He cited Waco MLS statistics for February showing 40 homes were sold for $200,000 to $299,900; 18 sold for $300,000 to $399,000; three for $400,000 to $499,900; six for $500,000 to $599,900; two for $700,000 to $799,900; one for $800,000 to $899,900; and one for $1 million or more.
Listings stayed on the market an average of 79 days, compared to 98 days in February last year, according to Gustafson and the Waco MLS.
Ingham said retail spending hit $273 million locally in January, an almost 4 percent year-over-year decline. He analyzes sales in Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, Waco, West and Woodway. Spending in January is processed by the State Comptroller’s Office in February for sales tax rebates to cities and taxing districts in March.
The Comptroller’s Office, meanwhile, reported Wednesday that while several communities around Waco did see smaller rebates, Waco’s increased. Its $2.95 million March check was 4 percent higher than that last March.
Also Thursday, Collins said the local economy has created an estimated 1,500 jobs the past year. The jobless rate dropped to 3.7 percent in January.
“Anything in the 3s is considered full employment,” Collins said. “What makes the figure even more impressive is that the rate continues to fall though our job force grows. People are moving to the area to find work.”
Spending on hotel stays reached $3.6 million in January, a 27 percent year-over-year increase as Waco’s reputation a tourist mecca continues to grow. The number of out-of-town visitors reportedly has increased from half-a-million in 2013 to 2.65 million last year, according to Collins and Waco City Councilman Jim Holmes, a bank executive who attended the meeting.
Chris Dyer, new president and CEO of the Dr Pepper Museum, said the attraction is scrambling to deal with attendance that has grown to about 160,000 a year with resources designed to accommodate 40,000.
Collins, asked about McLennan County’s population moving beyond 250,000, said the community now appears on the radar of retailers and restaurant chains who may previously have ignored it. Some suggested that Houston-based Pappadeaux might look more favorably at the area.
“If I could land Pappadeaux, I could retire,” Collins said with a laugh.
During a roundtable discussion, business leaders had these observations:
- Andrew Smith, executive director of the McGregor Chamber of Commerce, said a 400-unit subdivision is taking shape in the community about 15 miles west of Waco on U.S. Highway 84. Applying a multiplier of two people per new home, the neighborhood will have quite an impact on the 5,000-person community. Smith said he works closely with Collins and the city of Waco on industry recruitment and is pursuing a prospect “that would be a region changer.” He said he could not discuss the prospect’s identity.
- Dylan Marshall, general manager of Fuego Tortilla Grill on Interstate 35 in South Waco, said business is growing 15 to 25 percent monthly year-over-year. He said two or three customers daily visit the restaurant who say they grew tired of waiting in line at Chip and Joanna Gaines’ Magnolia Table restaurant on Waco’s traffic circle, also in South Waco.
- Claire Kultgen, an executive at Bird-Kultgen Ford, said Ford corporate has all but quit producing cars except the Mustang, preferring to focus on trucks and SUVs. She said response to the dealership’s quick-service center has been heartening. The car store averages seeing 55 service customers daily. “And we’re seeing more people who know nothing about the dealership, though we’ve been in business more than 80 years,” Kultgen said.
- Jordan Gandy, owner of nine UPS stores in Central Texas, including three in Waco, said more homeowners are paying the roughly $20 a month to have packages delivered to UPS-controlled off-site locations. They typically fear packages being stolen from their homes.