The housing market in Waco is vibrant and dynamic, characterized by robust activity and steady growth. With significant increases in sales volume and prices, both single-unit residential housing and single-family homes are in high demand, reflecting a healthy appetite among buyers.
One of the key indicators of market competitiveness is the rise in both average and median prices, signaling strong buyer interest and competition for available properties. Additionally, the surge in sales volume demonstrates the willingness of buyers to actively participate in the market, further contributing to its competitiveness.
The future market outlook for Waco remains positive, albeit with some potential challenges on the horizon. Continued job growth and economic stability bode well for sustained demand in the housing market. However, factors such as limited inventory and rising prices may pose challenges for prospective buyers.
Current 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 Janua
Waco Single-Unit Residential Housing
The market for single-unit residential housing witnessed a notable surge in activity, with sales volume experiencing a substantial 16.13% year-over-year (YoY) increase, climbing from 155 to 180 transactions. This surge translated into a significant boost in dollar volume, rising from $49.11 million to $62.72 million.
One of the most striking aspects of this surge is the 9.98% YoY increase in the average sales price, soaring from $316,815 to $348,437. Similarly, the average price per square foot saw a commendable rise from $160.02 to $170.77. Median prices also experienced an 8.99% YoY uptick, ascending from $266,985 to $291,000, with the median price per square foot following suit, increasing from $165.65 to $170.24.
Despite the surge in activity, there was a slight increase in months inventory for single-unit residential housing, rising from 2.5 to 3.7 months supply. Additionally, the days to sell rose from 90 to 96, reflecting a market that remains robust but may be experiencing a slight adjustment period.
Waco Single-Family Homes
Similar to the single-unit residential housing market, the market for single-family homes also witnessed a substantial 16.78% YoY increase in sales volume, jumping from 149 to 174 transactions. This surge in transactions translated into a corresponding rise in dollar volume, increasing from $47.72 million to $61.22 million.
Furthermore, the average sales price for single-family homes experienced a 9.86% YoY increase, rising from $320,247 to $351,828. The average price per square foot also saw a notable rise from $157.42 to $169.08. Median prices followed suit with an 9.19% YoY increase, climbing from $268,300 to $292,950, accompanied by a rise in the median price per square foot from $164.46 to $170.24.
Despite the surge in sales volume, there was a slight increase in months inventory for single-family homes, rising from 2.5 to 3.7 months supply. Additionally, the days to sell increased from 90 to 98, indicating a market that is active but may be undergoing a period of adjustment.
Waco Economic News
Beyond the realm of real estate, the economic landscape of Waco has also seen noteworthy developments. According to the latest figures from the Texas Workforce Commission, the average monthly job count witnessed a 3.21% YoY increase, surging from 131,708 in 2022 to 135,933 in 2023. This increase represents a net addition of 4,225 new jobs, indicating a thriving job market.
However, alongside this growth in job count, there has been a slight uptick in the average monthly unemployment rate, rising to 3.78% from 3.60% in 2022. While this increase may raise some concerns, it is essential to view it
ins optimistic, with Waco poised to maintain its status as a desirable real estate market.
Buyer's or Seller's Market?
Given the current state of the housing market in Waco, it can be characterized as a seller's market. With strong buyer demand, limited inventory, and rising prices, sellers hold the upper hand in negotiations. Multiple offers and bidding wars are not uncommon, as buyers compete for limited housing stock.
For buyers, this means having to act quickly and decisively when pursuing a property. It also requires being prepared to make competitive offers to stand out in a competitive market. While this may present challenges, it also underscores the desirability of Waco as a real estate investment destination.
Waco Housing Market Forecast for 2024 and 2025
The Waco housing market, as reported by Zillow, offers insights into various key metrics that define its current status and future trajectory. As of February 29, 2024, the average home value in Waco stands at $191,243, reflecting a slight decline of 0.2% over the past year. Homes in Waco typically spend approximately 49 days on the market before going pending, indicating a relatively brisk pace of sales.
Housing Metrics Explained
For Sale Inventory: The inventory of homes available for sale in Waco as of February 29, 2024, stands at 482, providing potential buyers with a range of options to consider.
New Listings: With 95 new listings hitting the market in February 2024, there continues to be a steady influx of properties available for purchase.
Median Sale to List Ratio: The median sale to list ratio, reported as 0.971 as of January 31, 2024, indicates that homes in Waco typically sell for slightly below their listed price.
Median Sale Price: As of January 31, 2024, the median sale price for homes in Waco is $225,283, providing a benchmark for understanding the market's pricing dynamics.
Median List Price: The median list price for homes in Waco, reported as $258,983 as of February 29, 2024, reflects the expectations of sellers in the current market environment.
Percent of Sales Over/Under List Price: In January 2024, 15.6% of home sales in Waco were recorded above the list price, while 70.5% were below the list price, indicating the negotiation dynamics between buyers and sellers.
Waco MSA Housing Market Forecast
The Waco Metropolitan Statistical Area (MSA) housing market is projected to experience moderate growth in the coming months. According to the forecast data provided for the period ending March 31, 2024, the region is expected to see a 0.4% increase in housing market activity. This growth is anticipated to continue, with a forecasted rise of 0.7% by May 31, 2024, and a more substantial increase of 2% by February 28, 2025.
The Waco MSA encompasses several counties in central Texas, including McLennan County, where the city of Waco is located, along with neighboring counties such as Bosque, Falls, Hill, and Limestone. Collectively, these counties contribute to a significant housing market, serving both local residents and those moving into the area for various reasons, including employment opportunities, education, and quality of life.
Are Home Prices Dropping in Waco?
While the average home value in Waco has experienced a slight decline over the past year, it does not necessarily indicate a widespread trend of dropping home prices. Fluctuations in home prices are common in real estate markets and can be influenced by various factors such as economic conditions, housing supply, and demand dynamics. It's essential to consider the broader market trends and consult with real estate professionals for a comprehensive understanding of price movements.
Will the Waco Housing Market Crash?
There is no indication of an imminent housing market crash in Waco. While real estate markets are subject to fluctuations and uncertainties, the current conditions in Waco suggest stability and resilience. Factors such as steady demand, moderate inventory levels, and economic growth contribute to a favorable outlook for the housing market. However, it's essential for both buyers and sellers to stay informed and adapt to changing market conditions.
Is Now a Good Time to Buy a House?
For prospective buyers considering a purchase in Waco, now can be an opportune time to enter the market. With a balanced market favoring neither buyers nor sellers overwhelmingly, buyers have the advantage of choice and negotiating power. Additionally, the slight decline in average home values, coupled with favorable mortgage rates as compared to last year and a steady supply of new listings, presents favorable conditions for buyers seeking to make a purchase. However, individual circumstances and preferences should always be considered when making such significant financial decisions.
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