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Waco economy in a gift-giving mood during the holidays

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Black Friday (copy)

A crowd of about 130 people make their way into Target as it opens on Black Friday. Spending in Waco totaled $458 million in November, $357 million in December and $4.6 billion for all of 2021, up 15% from 2020.

Big spending in November and December capped a yearlong buying binge, and the Greater Waco Economic Index celebrated with a record-setting year.

Shoppers apparently pushed aside inflation and COVID-19 concerns to celebrate the holidays with pocketbooks agape. They shelled out $458 million in November, $357 million in December and $4.6 billion for all 2021, reported West Texas economist Karr Ingham, who grades the local economy for the First National Bank of Central Texas and the Tribune-Herald.

“For the year, general real spending across the metro area easily set a new annual record and was up by 15% compared to the 2020 annual total,” Ingham wrote of the jump from the previous year’s $4 billion tally.

But the good news did not stop with spending. Ingham said all of the GWEI’s various components except building permit valuations finished the year in better shape than in 2020, and most set new records in 2021.

Raw numbers show the index improved to 144.6 by December, a nearly 10% improvement from the 131.9 in December 2020.

“The recovery from COVID in 2020 was beyond impressive, and the local economy was largely firing on all cylinders in 2021,” Ingham wrote. “It was an impressive year all the way around – spending, employment, housing, and construction. That momentum should carry into 2022, though we will have a better handle on the final trends with the release of the 2021 revised employment data in a month or so.”

Digging deeper into the numbers, Ingham said the 3,507 homes sold during 2021 is a record and the first time the 3,500 mark had been surpassed. Fourth quarter sales were up 4.4% year-over-year, though December sales came in two homes shy of the same month a year earlier.

He uses Waco Multiple Listing Service data to arrive at totals.

With demand high and inventory low, sales prices continued to rise. Last year’s homebuyer paid $277,146 on average, a 15% year-over-year increase. But December put that norm to shame. Homes sold for $310,767 on average, a nearly 20% year-over-year increase, Ingham reported.

Bottom line, he said, the Waco area saw nearly $1 billion in home sales last year, according to inflation-adjusted dollar volumes.

Buying cars and homes at record levels, one would assume locals are finding work. Ingham applied fact to that assumption, reporting that 128,100 people held jobs in the Waco Metropolitan Statistical Area in December. The Waco MSA includes Falls and McLennan counties. The December job count was 5,000 more than in December 2020, which is only part of the good news, Ingham said.

The area lost about 11,000 jobs in March and April 2020 but had added about 14,600 jobs through December, “an impressive run that is likely to continue on into 2022,” he wrote.

Employment estimates for Waco and other metro areas will be revised for 2021, and perhaps 2020 to a lesser degree, when the Texas Workforce Commission performs its annual recalculation, he said. Any changes in data will be reflected in GWEI analyses throughout the year.

Waco’s Motor Mile, the dealership strip along Loop 340, faces more than a year of challenges as work proceeds on the $55 million mall-to-mall project. Houston-based Webber will carry out the Texas Department of Transportation’s directive to create continuous frontage roads and replace highway bridges between Bagby Avenue and Waco Drive, near Central Texas Marketplace and Richland Mall, respectively. The task may require the posting of a “Pardon Our Dust” sign.

But until then, dealers are making hay before the dust rises.

Real auto spending, so named because inflation is factored and accounted for, skyrocketed 44% in November, totaling nearly $60 million. Spending for the year totaled $868 million, a 16% year-over-year increase.

Waco’s lodging industry, practically placed in a sleeper hold by pandemic-related restrictions in 2020, continues to regain its vigor.

Hotel spending hit $6.5 million in December, an 87% rise from the $3.5 million in December the previous year. All of 2021 saw nearly a doubling of hotel revenue, climbing to $78 million from $40 million. Consider that in 2000, which Ingham uses as a base year in preparing GWEI, spending on hotel stays totaled $28 million. This was well before Waco’s emergence as a tourist destination, fueled by Chip and Joanna Gaines’ Magnolia Market.

From McLennan County’s perspective, every percentage point counts. A $35 million revenue bond issue to cover construction of a new multipurpose center at Bosque Boulevard and Lake Air Drive is backed by a levy on hotel stays and car rentals. The money also will partially finance a new Lake Air Little League and Challenger League complex and new Paul Tyson Field for Waco High School.

Homebuilding continued to make waves in 2021, despite rising material costs and a lament among some builders that talented help is hard to find.

Waco issued 65 permits to build single-family home in December, a nearly 55% jump from December 2020. For the year, 661 permits were issued, a razor-thin 1.1% year-over-year bump, but still an increase.

These numbers reflect only permits to build homes in Waco city limits, not in the suburbs or Waco’s extraterritorial jurisdiction.

For comparison’s sake, Waco issued 197 permits to build homes in 2000, again Ingham’s base year in calculating the GWEI.

Permits to build non-residential structures such as commercial or industrial buildings were not highlight material in 2021. They were valued at $601 million, down 10% year-over-year, Ingham reported.

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