A Look at the Market for the Real Estate Obsessed

by Leah Cox, Broker/Owner, Kelly, Realtors

Waco boasts a very diverse economy and has seen prosperity, even during hard times. The Greater Waco area has experienced a shift that will continue for the foreseeable future with new businesses and ventures calling the area home. While this may bring more jobs, better opportunities, and greater diversity, it also means more people, more traffic and an increase in the price of homes, both for purchase and for rent. But, one fact is certain: it’s a sellers’ market. With low inventory and delays on new builds, there is more competition for available properties in the form of increased showings, fewer days on the market, multiple offers, and even backup offers.

Low-interest rates on loans make it appealing for many first-time buyers to jump into homeownership, and it is, in fact, one of the factors that has kept the market moving quickly. Many experts predict interest rates will increase, which may or may not impact the market.

Several factors come into play when looking at real estate. Waco’s population has increased 13.73% since the 2010 census, experiencing an average 0.96% growth a year. Over the past two years, we’ve noticed more people moving to Waco from other parts of the state, the country, and even international locations. As the new workforce, office model, and workweek take shape, there is a global population with more freedom of choice to work where they live, not live where they work. Many people flocking to Waco are doing so thanks to lower median home values than the national average, the ability to work remotely, and inspiration by media coverage pointing to Texas, and Waco specifically, as a market to watch. Just last year, The Wall Street Journal and Realtor.com listed Waco as a Top 10 emerging housing market. Locally, anyone with their ears to the ground was expecting this. The trend has been homes selling above asking price and staying on the market only for a few days, while still being priced lower than the national average.

Commercial real estate has faced some unique challenges of its own. Downtown Waco has experienced a surge of activity with new projects, including hotels and office spaces, under development to meet new needs and follow new trends. New housing complexes are on the rise along the riverbank. Demand is strong for owned and tenant-occupied properties, and interest in the Waco Industrial Park is high.

Bradley Schurman, founder and CEO of The Super Age, presents a very real conundrum that we must deal with as a society: how to address an aging population and longer life expectancy. People in all age brackets are generally healthier and more active than ever. In his research, he notes that the majority of ‘first-time parents’ in other developed countries is shifting towards the ages of 40-49. In the U.S., the average age of first-time mothers shifted from 21 years of age in 1970 to 29 years old in 2019, with a large number waiting until the mid-30s to become firsttime mothers. As a society, we will need to remain in the workforce longer than the projected ‘ideal’ retirement age of 65, not only to sustain ourselves, but also our children. In terms of real estate, this means that milestones and goals are happening at different times, and adjustments must be made by all parties to achieve desirable solutions. For residential real estate, this may mean rethinking the timing of downsizing, relocation, scaling up or down, amenities and square footage versus convenience, where city amenities factor into the equation and vacation home acquisitions, among others. This also means cities must prepare or develop infrastructure to deal with a large aging population, in addition to expanding city limits as the population flocks from one area to another.

As a community, we’re rethinking mobility solutions and intended design. From builders addressing home design, flexibility and work-from-home spaces, the city is addressing issues through rezoning and implementing fees to fund new needs, due to the way infrastructure is used, updated and also taking into account climate changes.

As digital literacy expands, real estate has risen to meet the challenges of this trend. Data from RedFin shows that 63% of home sales were site-unseen in 2020. While this was largely due to the pandemic, it is a trend that continues, as the general population seeks convenience and speed in transactions. Clients are requesting video tours when they are unable to travel to tour a home, or to fit it around a busy schedule. Some clients request remote tours or view pre-recorded tours to narrow down choices. At the speed the market is moving, sometimes the only way to see a home is through a gallery of photos or video tours on a company website, or through an agent’s social media feed, since offers may start pouring in as soon as a property hits the market. If you want to be the first to strike, you may need to submit an offer based on photos alone.

When looking at residential real estate, certain considerations should be taken to ensure success. Of course, buyers and sellers face different challenges; let’s look at an overview of some things that may help.

Low-inventory for buyers means that some steps may need to be considered in order to realistically be able to play in this market:

Evaluate wants and make sacrifices. When looking to buy a home, think of “nice-to-have” versus “musthave” and adjust your search based on this criteria and your budget. This may mean finding the best that you can now with plans to upgrade in the future. We are working diligently with builders and keeping a close eye on new developments. Maintaining a relationship with a realtor or brokerage firm that is up-to-date is crucial when moving forward.

As always, securing preapproval before starting your search is a good idea; when the home supply is at an all-time low, it’s critical.

In times like these, consider expanding your search area, as it may provide you with something closer to what it is you seek. Homes outside city limits may meet more demands in terms of space and home amenities, while homes closer to the city center would appeal to those seeking a more active social life and general convenience when shopping and meeting social needs.

For a seller, low inventory is great news; it means less competition and potentially multiple offers for a home. This may also mean having the upper hand when it comes to negotiations and repairs. However, before jumping for joy at this news, sellers must consider what steps they will take after the sale. If you are selling in order to buy somewhere else, make sure you have a plan. Working with a realtor will provide an understanding and connections to a market you may not be familiar with, as well as insight into nuances associated with certain areas.

While many may be surprised at the average price of a home, take into consideration the rising cost of most goods and services. From groceries to building materials, we’ve watched as prices climb. That being said, experts predict the rate at which prices are increasing will slow down somewhat. Waco is a very attractive market because while our prices have risen, they are still lower than the national median home price; the median price of a home in Waco is over $250,000, while the national median home price is over $363,000.

My advice is to be sensible and approach real estate with a level head. Find out exactly what you can afford, and operate within those constraints. Mortgage and interest rates are still incredibly low. In 2021, we hit the lowest recorded rate since Freddie Mac started reporting 30 years ago. While rates have risen since then, they are still quite beneficial and attractive.

Photo by Ronnie George