|October 26, 2016||Comments Closed|
Trends in building and selling homes in Greater Waco dominated the conversation Wednesday when several business and community leaders met at the First National Bank of Central Texas to discuss a September economic snapshot prepared by Amarillo-based economist Karr Ingham.
Applying factors such as vehicle sales, hotel and motel tax revenues, home construction and job creation, Ingham reported the Greater Waco Economic Index set a new record last month. Its total score reached 124 using data dating back to the year 2000, an increase from 123.2 in August and 120.1 in September last year.
Ingham prepares the report monthly for First National, which hosts a presentation of its findings, and the Waco Tribune- Herald.
“Through the end of the third quarter 2016, the greater Waco metro area economy has enjoyed steady expansion for 56 months and counting, and the index has grown by nearly 24 percent during that time,” Ingham said. “There is virtually nothing to suggest the trend of general economic growth will not reach the five-year mark in January 2017.”
The housing industry continues to demand attention, Ingham said. The city of Waco issued 130 permits to build single-family homes during the months of July, August and September, which is twice the 61 issued during the same three months last year. The city has issued 316 permits so far this year, up from 285 at this time last year.
Scott Bland, president of the Heart of Texas Builders Association, said national companies, including D.R. Horton and Stylecraft Builders, have entered the Central Texas market with a vengeance, buying the lion’s share of lots available and launching large subdivisions.
“That third-quarter total for permits issued ranks as the highest third-quarter total on record and is right up there with some of the highest totals for any quarter over the history of GWEI analysis,” Ingham said.
Home sales remain hot, with 240 existing residences changing hands in September, up from 200 in September of last year.
The result is that Waco’s housing inventory stands at 2.7 months, which means it would take less than three months to sell every home on the market at the current pace.
“I’ve never seen anything like this in Waco,” Bland said of the housing picture.
The average price for a home sold in September stood at $179,905, which was 3.5 percent less than the $186,521 in September of last year. But the third- quarter average of $185,993 was 5 percent higher than the comparable period in 2015, and the year-to-date norm of $180,853 eclipses last year’s by 5.2 percent.
“Unfortunately, we’re already pricing some people out of the market,” Bland said.
He said buyers locally and elsewhere have become spoiled by mortgage interest rates hovering between 3 and 4 percent and may experience sticker shock when they increase to between 5 and 7 percent, which builders, including himself, know has been the average for most of their homebuilding careers.
“If you’re in the market to buy a home, you’d better take advantage of these interest rates while you can,” Bland said.
John George, president of Award Specialties, said revenues are growing at 8 percent annually, which is typical during stellar economic times.
“But what I’m wondering is why Waco’s economy is doing so well. Does anybody have an answer to that?” George said during the gathering at First National Bank.
The reasons are plentiful, said Whitney Richter, a representative of the Greater Waco Chamber of Commerce who presented Ingham’s findings. Richter said economic development efforts are proving fruitful, with Waco and McLennan County offering incentive packages to Allergan to choose its Waco plant for expansion. The pharmaceutical company will spend $200 million to enlarge its facility on Mars Drive by more than 300,000 square feet and will hire 75 people near-term and eventually 200.
The “Fixer Upper” show on HGTV, starring Chip and Joanna Gaines, has created interest in Waco real estate, brings 35,000 tourists a week to Magnolia Market at the Silos and has prompted the chamber and downtown development groups to consider how best to take advantage of this national interest.
Development along Lake Brazos and downtown has captured the fancy of out-of-town developers who will create more jobs and opportunity, Richter said.
In other discussion Wednesday:
Richard Karr, owner of Richard Karr Motors, said his body, parts and service departments have seen tremendous revenue increases since he relocated from Lake Air and Valley Mills drives to West Loop 340.
Mission Waco executive director Jimmy Dorrell said a soft opening for the new Jubilee Food Market at South 15th Street and Colcord Avenue is set for Nov. 21, only three days before Thanksgiving Day, and a grand opening is scheduled for Dec. 1. Mission Waco raised $520,000 to convert an old 6,500-square-foot Safeway building into a nonprofit grocery that would serve a so-called “food desert” in North Waco, where residents can’t find fresh produce and nutritional food near their homes.
Spending on automobiles through September totaled more than $450 million, 8.6 percent more than the almost $415 million during the first nine months last year. Meanwhile, hotel and motel tax receipts continue to climb. They hit $4.1 million in September, 25 percent more than the $3.3 million the previous year.
Retail spending locally has climbed to $2.5 billion through September, a modest 1.1 percent increase from the $2.49 billion last year.