Waco Housing Market: Home Prices, Sales, Forecast
The Waco housing market is experiencing changes in 2023, with decreases in sales volume and home prices. The increase in months of inventory suggests a shift towards a more balanced market. Job growth in Waco has been positive, but the rise in the unemployment rate is a point of concern.
Waco Housing Market Report
Let’s dive into the latest housing data for Waco, Texas, sourced from Texas REALTOR and analyzed by the Texas Real Estate Research Center, focusing on September 2023.
Waco Housing Sales Analysis
Waco’s housing market witnessed a 15.23% year-over-year decrease in sales volume for single-unit residential housing, dropping from 256 to 217 transactions. Year-to-date sales accumulated to 2,175 closed listings. The dollar volume also declined, going from $78.02 million to $63.25 million.
Are Home Prices Dropping in Waco?
The average sales price in Waco dipped by 4.36% year-over-year, falling from $304,773 to $291,475. The average price per square foot subsequently declined from $167.90 to $160.77. Median prices also witnessed a decrease, with a 1.11% year-over-year decline from $270,000 to $267,000, and the median price per square foot dropped from $167.31 to $166.13.
Inventory and Days to Sell
Months of inventory for single-unit residential housing in Waco increased from 2.2 to 4.0 months supply, indicating a shift in market dynamics. Days to sell also rose from 66 to 90, suggesting a slightly slower pace of sales.
Single-Family Homes in Waco
For single-family homes in Waco, sales volume experienced a 15.79% year-over-year decrease, going from 247 to 208 transactions. Year-to-date sales amounted to 2,095 closed listings. The dollar volume also declined, dropping from $76.52 million to $61.19 million.
Waco Home Prices for Single-Family Homes
The average sales price for single-family homes in Waco dipped by 5.04% year-over-year, falling from $309,803 to $294,193. The average price per square foot subsequently declined from $168.10 to $160.14. Median prices for single-family homes declined by 2.53% year-over-year, going from $275,000 to $268,045, and the median price per square foot decreased from $168.43 to $166.03.
Market Dynamics for Single-Family Homes
Similar to single-unit residential housing, months of inventory for single-family homes in Waco rose from 2.3 to 4.1 months supply, and days to sell increased from 65 to 90.
Economic News and Job Growth
In September 2023, the Waco Metropolitan Statistical Area (MSA) experienced an increase in jobs from 133,600 to 136,200, marking a 1.95% year-over-year increase compared to September 2022. This translates to a net gain of 2,600 new jobs. Over the past five years, the job growth rate in Waco has averaged 2.00% annually.
However, it’s worth noting that the unemployment rate in Waco increased to 3.70% in September 2023, up from 3.40% in the previous year. Buyers and sellers in the Waco real estate market should stay informed and adapt to these evolving conditions.
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 posi
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.
References:
- https://www.zillow.com/waco-tx/home-values/
- https://www.recenter.tamu.edu/research/housing-reports/#!/MSA/Waco
