December 28, 2018
By MIKE COPELAND [email protected]
Big-ticket purchases pushed the Greater Waco Economic Index into record territory last month, with home and vehicle sales also climbing into record territory, according to a report by Amarillo-based economist Karr Ingham.
A total of 236 single-family homes changed hands, “easily a November monthly record and up by about 6 percent compared to November of 2017,” which boasted the previous high, Ingham reported. He prepares a monthly snapshot of economic indicators for the First National Bank of Central Texas and the Tribune-Herald.
The year-to-date total of 2,717 homes sold through November is running almost 8 percent ahead of last year’s count after 11 months.
Paula Mohan, a nine-year agent with Kelly Realtors, said 2018 has been great, as Ingham’s numbers would indicate, but she has noticed a slight softening.
“Houses are staying on the market a little longer,” Mohan said. “I’m seeing more price reductions, and some initial prices aren’t as high as they were.”
Indeed, Ingham’s reporting shows the average price for a home sold in November was $194,822, down 2.3 percent from the $199,439 norm a year earlier. Still, for the year through November, the average hovered around $202,551, 3.5 percent more than the 11-month average last year.
Leah Cox, president of Kelly Realtors, said 2018 was a “quirky year” and that she is cautiously optimistic about 2019, though the Texas Legislature’s looming session and the Federal Reserve’s apparent willingness to continue raising interest rates give her pause. Cox, who earned her license in 2013 “but has never really not been in real estate,” said she remains impressed with the city of Waco’s commitment to preserve and improve infrastructure, an attitude that builders and homeowners find encouraging.
The Federal Reserve earlier this month raised a key interest rate 0.25 percent, its ninth hike since December 2015. The central bank has indicated it will consider at least two more hikes in 2019, down from the three it had previously announced.
Veteran real estate agent Camille Johnson said rates remain tame.
“I can remember getting in this business when rates were 16 to 18 percent, so they are still low to me,” Johnson said. “My mentor, Jim Stewart, said if rates average 10 percent or less, that’s great. And what have they been in recent years, 4, 5 or 6 percent? I don’t see the market being affected.”
She said several areas of Greater Waco remain hotbeds of home sales, including North Waco, the U.S. Highway 84 corridor and China Spring. She also said December and January typically are “dead” months for transactions, “but I sold two homes on Christmas Eve, a nice Christmas present.”
Waco issued 38 permits to build new homes in November, a 2.7 percent increase, while 511 permits had been dispensed through last month, a 14 percent rise from the 448 through November last year.
Calculations applied to employment, home and commercial construction, home sales, retail spending and lodging activity show the Greater Waco Economic Index surged to a record 130.7 in November, a fractional increase from the revised score of 130.1 in October, and well above the 126.7 in the same month a year earlier. The 3.2 percent year-over-year growth in the index is the highest since the 3.5 percent jump in February 2017.
“The Waco metropolitan area economy is closing in on seven years of expansion, and that milestone is set to be achieved in January 2019,” Ingham wrote in his report provided this week to the Greater Waco Chamber of Commerce, The First National Bank of Central Texas and the Tribune-Herald.
Other highlights of the index include the following:
The Greater Waco Economic Index is a monthly snapshot of the city’s economic status produced by Amarillo-based economist Karr Ingham. The 19 indicators used include retail sales, auto sales, building permits, average home sale prices, airline enplanements, employment data and other statistics.
The Trib publishes the index in partnership with the First National Bank of Central Texas.