With Californians, retirees and empty-nesters flocking to Central Texas, home sales continue to set records and brisk construction cannot keep pace with demand, according to a West Texas economist who tracks local trends.
For the first time ever, more than 1,000 homes were sold during a quarter in Greater Waco, as 1,033 changed hands during the three months ending Sept. 30, Amarillo-based Karr Ingham reported. He compiles the Greater Waco Economic Index for the Tribune-Herald and First National Bank of Central Texas using data dating to 2000.
“The September monthly total was a record for the month as well, and the year-to-date sales total is also the highest on record, and is up by over 5% compared to the first nine months of 2019,” Ingham wrote.
Waco residential real estate specialist Trish Griffin, with Kelly Realtors, said she has been busy all summer, but the market could purr even louder if there were more homes available for less than $350,000. She said home demand is rampant, mentioning her experience with listing a property priced in the neighborhood of $200,000. She said showings “were back-to-back,” and she received seven offers over a period of two days.
Prospects from California, Nevada and Oregon, and from elsewhere in Texas, are showing interest in the local housing market, Griffin said.
Ingham used superlatives to describe construction trends, writing that the 285 permits issued during the third quarter “is by far the highest quarterly permit total, and in fact represents the first time more than 200 permits were issued in any quarter.”
“The 537 permits issued for the first nine months of the year is also a record, up by 14% year-over-year, and is higher than the ‘annual’ totals for every previous year other than 2019,” he said.
Still, the GWEI hit a few potholes in September as it continues its recovery from COVID-19, said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce. She presented Ingham’s findings during a Zoom meeting with invited business leaders.
The GWEI raw score fell to 131.1 for September, down from 131.3 in August and down 1.1% from the 132.6 in September last year.
Retail spending, for example, negatively reversed course following a sharp increase in August. It dropped 8.4% from September a year ago.
But signs indicate locals are doing their best to shrug off the lingering effects of the pandemic. They spent $997 million on retail purchases during July, August and September, a 3.7% increase from the third quarter last year. Yearly retail spending through September totaled $2.85 billion, which reflects a 1.1% increase, impressive under the circumstances, Ingham said.
Automobile spending remains a bright spot, hitting $51 million in September, $175 million during the quarter and $495 million for the year — reflecting year-over-year jumps of 6.6%, 7.4% and 5.3%, respectively.
Sales “took off like a rocket ship,” starting in mid-March, said Derek Scott, general manager of Jim Turner Chevrolet in McGregor. Scott said car dealers just about everywhere continue to struggle with inventory shortages.
Permits to build commercial, industrial and other non-residential buildings nosedived in September, falling to $17.8 million compared with $41.8 million in September last year. But the category is not entirely lost, as permits during the third quarter totaled $92 million, an almost 16% jump from last year.
October numbers should prove eye-popping, as Amazon secured a permit valued at $215 million to build a fulfillment center on Exchange Parkway.
Collins said the center should open for business in fall of next year.
Slowly but surely, the tourism and leisure industry is rising to its feet, Collins said. Hotel revenues plummeted 70% in April from a year earlier, but by September, the year-over-year deficit had been reduced to 24%. That being said, Ingham reported that revenues for the quarter were down 46% and those for the year through September were off by about 40%.
Ingham said in his report people are going back to work. The Waco Metropolitan Statistical Area, which includes Falls and McLennan counties, lost 11,500 jobs in March and April. But 10,200 have been recovered, including another 600 added in September.
“What is not yet known is whether the same jobs have been added back — whether they are full or part-time, or whether they are at lower wage rates,” Ingham wrote. “The September breakdown suggests that ‘leisure and hospitality’ employment, which includes lodging, food services, and other business hit hard by COVID, remains down by over 20% compared to the September 2019 estimate for that employment category.”
He said year-over-year job growth has occurred in construction, education/health services, professional/business services, and government. Trade/transportation/utilities joined leisure/hospitality in losing jobs.
The jobless rate during the pandemic peaked at 10.5%. It continues to drop, but at 6.4% remains double that of September 2019, Ingham reported.
“The Greater Waco metro area economy continues its impressive response to the sharp downturn caused by COVID and the resulting partial economic shutdown,” Ingham wrote. “The housing components are particularly impressive, and the economy continues to steadily add back the jobs that were lost in March and April. General spending appears to have turned the corner, though the recovery is a bit choppy so far.”
Despite the stumble in September, the index increased in the third quarter, expanding at a 5.4% annualized rate, he reported.