The Waco housing market is undergoing changes in 2023, with a decline in sales volume and home prices. However, there is also an increase in months of inventory, indicating a shift towards a more balanced market. While job growth in Waco remains positive, there is a slight rise in the unemployment rate, which is a cause for concern.
Current Waco Housing Market Report 2023
Let's delve into the latest housing data for Waco, Texas, sourced from Texas REALTOR and analyzed by the Texas Real Estate Research Center, with a focus on October 2023.
Sales Volume and Dollar Volume
The sales volume for single-unit residential housing experienced a significant year-over-year (YoY) decrease of 26.15%, dropping from 283 to 209 transactions. This decline is also reflected in the dollar volume, which decreased from $101.36 million to $77.13 million. Year-to-date sales accumulated to 2,384 closed listings, indicating a challenging market.
Average Sales Price and Price per Square Foot
Despite the decrease in sales volume, the average sales price exhibited a modest 3.04% YoY increase, rising from $358,173 to $369,066. Similarly, the average price per square foot saw an uptick from $174.52 to $176.98, reflecting resilience in property values.
Interestingly, the median price remained unchanged from October 2022. However, the median price per square foot showed growth, moving from $172.41 to $177.43. These nuanced changes suggest a mixed landscape in terms of property valuations.
Inventory and Days to Sell
The months inventory for single-unit residential housing witnessed a significant increase from 2.4 to 4.1 months supply. Days to sell also rose, indicating a shift in market dynamics, moving from 71 to 95 days. These metrics highlight a more balanced but slower-paced market.
Waco Single-Family Homes
Zooming in on the single-family homes segment, we observe similar trends.
Sales Volume and Dollar Volume
The sales volume for single-family homes decreased by 25.27% YoY, dropping from 273 to 204 transactions. Dollar volume followed suit, declining from $98.92 million to $76.25 million. Year-to-date sales for single-family homes totaled 2,299 closed listings.
Average Sales Price and Price per Square Foot
Despite the decrease in sales volume, the average sales price for single-family homes experienced a 3.15% YoY increase, reaching $373,778. The average price per square foot also rose from $173.05 to $176.26, indicating resilience in property values.
Median Price and Median Price per Square Foot
The median price for single-family homes rose 2% YoY, moving from $300,000 to $306,000. The median price per square foot also exhibited growth, increasing from $171.28 to $177.92.
Inventory and Days to Sell
The months inventory for single-family homes increased from 2.4 to 4.2 months supply, while days to sell rose from 72 to 96. These metrics suggest a more balanced but slower-paced market for single-family homes as well.
Economic Indicators
Job Growth
In October 2023, the Waco Metropolitan Statistical Area (MSA) witnessed a 1.94% YoY increase in jobs, growing from 134,100 to 136,700. Over the past five years, the average annual job growth rate stood at 2.25%, reflecting a steady expansion of employment opportunities.
Unemployment Rate
Despite job growth, the unemployment rate for October increased slightly from 3.40% in 2022 to 3.50%. This indicates that while job opportunities are expanding, the labor market may be experiencing increased competition.
Waco Housing Market Forecast 2023-2024
Looking ahead to the housing market forecast for Waco, Texas, data from Zillow provides valuable insights into what we can expect in the near future. The figures are based on data through September 30, 2023.
Current Waco Home Value
As of now, the average Waco home value stands at $214,923, representing a slight decrease of 0.2% over the past year. This indicates relative stability in home values.
Time to Pending Sales
For those looking to sell their homes in Waco, the time it takes for a property to go from listing to pending status is approximately 25 days. This reflects a relatively brisk pace in the local real estate market.
Market Metrics
Understanding market metrics is essential for both buyers and sellers. Here are some key metrics for the Waco housing market as of August 31, 2023:
- Median Sale to List Ratio: 0.982
- Percent of Sales Over List Price: 22.3%
- Percent of Sales Under List Price: 62.7%
- Median Days to Pending: 25
These metrics provide a comprehensive picture of the current state of the Waco housing market and can guide both buyers and sellers in their decision-making processes.
Waco Neighborhoods
Waco is a city with diverse neighborhoods, each offering unique housing opportunities. Here are some neighborhoods in Waco along with their respective Median Zillow Home Value Index (ZHVI):
- Brook Oaks: $129,604
- North Waco: $130,311
- Carver: $124,923
- Sanger Heights: $157,066
- Dean Highland: $157,541
- Downtown: $183,389
- East Riverside: $105,369
- Cedar Ridge: $233,430
- Landon Branch: $271,656
These figures give you an idea of the housing market dynamics in different parts of Waco, helping you make informed decisions about where to buy or sell a home.
Waco MSA Housing Market Forecast
While it's important to understand the local market, the broader Waco Metropolitan Statistical Area (MSA) also plays a significant role. Here's a glimpse of the housing market forecast for Waco, TX:
- Base Date: September 30, 2023
- 31-10-2023: -0.2%
- 31-12-2023: -0.3%
- 30-09-2024: 2.5%
This forecast suggests a modest decrease in home values towards the end of 2023, followed by a positive growth rate in 2024.
Should You Invest in the Waco Real Estate Market?
Population Growth and Trends
Investing in the Waco real estate market presents several compelling reasons, one of which is the city's population growth and trends. Waco has experienced steady population growth in recent years, with many individuals and families choosing it as their new home. This factor alone offers opportunities for real estate investors:
- Population Growth: The consistent influx of new residents indicates a growing demand for housing. As more people move to Waco, the need for both rental and for-sale properties increases.
- Young Workforce: Waco is home to several educational institutions, including Baylor University. This attracts students and young professionals, contributing to a dynamic and diverse community that often seeks rental properties.
Economy and Jobs
Waco's economy and job market are essential factors to consider when evaluating real estate investment opportunities:
- Economic Opportunities: Waco has seen a rise in economic opportunities, including job growth in various sectors. The recent increase in jobs, as evidenced by a 1.95% year-over-year growth, is a positive indicator for real estate investors.
- Diverse Industries: The city's economy benefits from a mix of industries, including manufacturing, education, healthcare, and agriculture. A diverse economic landscape can enhance a region's resilience to economic fluctuations.
Livability and Other Factors
Waco offers a high quality of life, attracting residents and making it an enticing location for real estate investment:
- Cultural Attractions: Waco boasts cultural attractions, including museums, parks, and historic sites, enhancing its appeal to residents and visitors.
- Affordability: The cost of living in Waco is relatively lower than in many larger cities, making it attractive for individuals and families looking for affordable housing options.
- Community Growth: The city's commitment to community development and infrastructure improvements ensures the area's long-term livability and potential for real estate appreciation.
Rental Property Market Size and Growth
The rental property market in Waco has seen significant growth and offers numerous opportunities for real estate investors:
- Student Housing: With several educational institutions in Waco, there's a consistent demand for student housing. Investing in properties near these institutions can yield stable rental income.
- Tourism and Short-Term Rentals: Waco has gained popularity as a tourist destination, drawing visitors to attractions like Magnolia Market. Real estate investors can tap into the short-term rental market by offering vacation homes or Airbnb-style accommodations.
- Rental Appreciation: Rental properties in Waco have the potential for appreciation, providing investors with both cash flow and the prospect of long-term capital gains.
Other Factors Related to Real Estate Investing
When considering Waco as an investment destination, here are some additional factors to keep in mind:
- Market Stability: Waco has demonstrated resilience in the face of economic challenges, making it a stable market for real estate investment.
- Local Regulations: Understanding local housing regulations and property management practices is crucial for a successful investment venture in Waco.
- Property Type: Assess whether you want to invest in residential or commercial properties and choose the type that aligns with your investment goals.
- Long-Term vs. Short-Term Investment: Decide whether you're looking for immediate rental income or long-term capital appreciation and choose properties accordingly.
The Waco real estate market offers a range of opportunities for investors, driven by population growth, a diverse economy, and a thriving rental market. However, thorough research, due diligence, and a clear investment strategy are essential to make the most of these opportunities. As with any investment, it's advisable to consult with real estate professionals and financial advisors before making a decision.
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