|March 29, 2017||Comments Closed|
Home construction and home sales paced the Greater Waco economy in February, and revised figures from the Texas Workforce Commission show the area created 2,900 jobs between February of last year and this year, according to a monthly economic snapshot produced by Amarillo-based economist Karr Ingham.
Ingham said the workforce commission each year analyzes employment data and makes revisions to the monthly estimates it made throughout the year when necessary.
With that process completed, Ingham said, the monthly average for the Waco Metropolitan Statistical Area, which includes McLennan and Falls counties, was revised upward by nearly 1,000 total jobs on average for 2016. Ingham said employment grew at a 2.7 percent monthly average applying the revised figures, compared to 2.2 percent per original estimates.
These changes raised the values for Ingham’s Greater Waco Economic Index, which he prepares for the First National Bank of Central Texas and the Tribune-Herald. He uses data dating to the year 2000 and considers factors including spending, employment, construction, vehicle sales and lodging revenue.
Though Ingham crunches the numbers and prepares a report, his findings typically are presented to a sampling of local business leaders by Whitney Richter, manager of business development and marketing for the Greater Waco Chamber of Commerce.
However, Ingham on Wednesday visited First National Bank of Central Texas to discuss his methodology and to join Richter in discussing the February results during a 90-minute session.
“This area has seen quite a post-recession economic recovery that has lasted for about 60 months,” Ingham said.
He also analyzes the economies of several other midsize Texas cities, including Lubbock, Abilene, Wichita Falls, Midland and Odessa; writes the Texas Petrol Index; and has prepared economic analyses for Denver, Colorado.
Ingham said the Greater Waco Economic Index ended the year with a raw score of 124.8, which reflects a 3 percent increase from December of 2015. The January index declined slightly to 124.7 under new index benchmarks, “but then logged an impressive increase in February to 125.6, a 3.5 percent increase from February of last year,” Ingham said in his report.
Permits issued for construction of new single-family homes in Waco soared to a record 62 in February, and the 95 permits issued through February is the highest January-February total on record.
Home sales also blossomed in February, with 188 residences changing hands, compared to 159 in the same month last year. The number of sales through February totaled 311, which is only three transactions shy of the record 314 sold during the first two months of 2015, Ingham said.
“The real total dollar volume of residential real estate sales activity is at a record level through February and is up by over 10 percent compared to the first two months of 2016,” Ingham said.
The average price of a home sold in the Waco metropolitan area during February rose to $166,926, an 8.4 percent increase from February of last year. Ingham said his finding is merely an average achieved by dividing the number of homes sold into the combined value of those homes. He said it does not mean homes in Greater Waco are increasing in value at an 8 percent clip.
Cooper Jones, the new president and CEO of the Texas Sports Hall of Fame, marveled at demand for homes in Greater Waco.
“I’ve lived in Washington, D.C., Atlanta and Phoenix, and I’ve never seen anything like it,” Jones said. “I’ve shown interest in three homes since I arrived, and other parties put down cash on each one by the end of the week. They did not just enter into a contract to buy them, they put up funding.”
Kathy Schroeder, vice president of residential services at Coldwell Banker Jim Stewart Realtors, said the good figures in February are merely a continuation of positive housing trends locally.
“There are so many factors at play,” Schroeder said. “The Dallas and Austin markets are still so strong, and we’re a nice alternative right in the middle. The ‘Fixer Upper’ show continues to bring awareness about Waco. Industry is growing, which brings workers in need of homes. And there has been concern about interest rates going up, and they still will a little, so potential buyers are making the decision right now to act. That includes empty nesters who are trying to ‘right-size’ their residences going forward.”
She said investors continue to salivate over Greater Waco and its housing prices, which remain relatively low despite recent increases.
“Maybe they watch something about Waco, then go to the internet to search for Waco homes. They can be found for $50,000, and you can’t buy dirt in California for that,” Schroeder said. “Also, Baylor University parents are doing a lot of buying. They may have two or three children who will be attending Baylor, and the rental market is very expensive in Waco, so they choose to buy instead.”
General construction activity is setting a quick pace during the first two months of the year. Permits for work valued at $38.5 million were issued for February, which is a record for the month, and the total of $61 million for January and February also reflects an all-time high, Ingham said in his report.
Revenue generated by local lodging establishments continues to have a positive impact on the index. The February total of $3.8 million represents a 28 percent increase, while the $6.5 million total in January and February reflects a jump of nearly 13 percent.
The automobile sector locally continues to perform well, with spending on new and used vehicles totaling $44 million in February, a 12 percent increase from the same month in 2016.
However, retail spending remained sluggish, Ingham said.
Total sales receipts in February reached about $360 million, almost 2 percent lower than the total of $366 million a year earlier.
“For the first two months of the year, general real spending is flat compared to the January-February 2016 total, and the total for the 12 months ending January 2017 is up by a modest 1.8 percent compared to the prior 12 months,” Ingham said.
The cities for which sales tax is analyzed and aggregated include Waco, Bellmead, Beverly Hills, Hewitt, Lacy Lakeview, Lorena, McGregor, Robinson, West and Waco.
During his presentation Wednesday, Ingham said he thinks the sharp contraction in the state’s oil and gas economy during 2015 and 2016 probably contributed to lackluster spending in Central Texas, though the area is not a hotbed of oil and gas activity.
Waco restaurateur Sammy Citrano, who owns two George’s Restaurant locations, said the spending figures surprised him.
“I’ve been in Waco 31 years, and this is the biggest boom the city has had in that time,” Citrano said. “I’ve seen a 10 percent increase in sales at one of my restaurants, 7 percent at the other, and this comes at a time when it seems like we have 30 to 40 new restaurants. It’s the Magnolia factor, and everybody benefits.”
He was referring to Magnolia Market at the Silos, which attracts an estimated 25,000 to 35,000 tourists to Waco most weeks, more during spring break.
“My dining room has people from New York, Colorado, all over, all here to experience the flavor of Waco,” Citrano said.