Summer sizzler for home sales
Local market posts best peak season since housing bust
For the first time in half-a-decade, Savannah-area Realtors needed the Labor Day weekend break from work.
A busy spring and summer home buying season climaxed in August with another strong month. The 468 sales made August the second best month for sales since the housing bust of 2008. The best sales month of that period, June 2012, saw 471 closed deals.
The three-county area recorded 1,780 sales over the four-month period – May to August -- considered home buying’s peak season. The totals were 12 percent better than 2011 and 28 percent better than 2010, when a federal homebuyer tax credit boosted sales.
The local home sales environment can still be considered a “buyer’s market,” according to Savannah Area Board of Realtors President Paul Gutting. But strong sales and shrinking inventory are gradually balancing the market, he said.
Significant activity to the west bodes well for a key driver to the local economy: home building and construction.
West Chatham, Bryan County and Effingham County saw significant summer spikes. West Chatham and Bryan County posted 23 percent gains this summer versus 2010 while Effingham County jumped 37 percent.
The buyers are a mix of newcomers to the area and existing residents moving west to take advantage of schools – New Hampstead High School opened in August – low prices and modern home amenities, Realtors said.
The sales activity continued to impact inventory. West Chatham and Bryan County had eight months supply inventory – meaning it would take eight months at the current sales pace to sell every house currently listed – heading into September while Effingham County had seven months.
A market with less than eight months inventory is considered undersupplied and attracts builder interest. Permits increased five percent in the second quarter compared to the same period in 2011 and the value of those permits climbed seven percent, according to Armstrong Atlantic State University economist Michael Toma.
Additionally, lot sales are up 50 percent in the western areas, hinting at busy times ahead for builders.
A ramp-up in home building is vital for the market, said Lawrence Yun, the National Association of Realtors’ chief economist.
“Ironically, if housing construction doesn’t pick up to normal levels within two years, supply shortages could be sustained for an extended period and lead to above average appreciation,” Yun said
The late summer also saw a run on perhaps the most troubled sector of the local housing market: condominiums. Condo sales hit a post-housing-bust high in August with 49 sales, led by the islands. As many condos sold on the islands, 19, in August as sold in the entire three-county area in August 2011.
Financing remains an obstacle, Realtors said, with many condo communities lacking the number of owner-occupants to qualify for government-backed loans. But prices are low enough to attract cash buyers and those with enough of a down payment to get non-traditional loans.
“Some people have been pulling money out of stocks to put it elsewhere, and getting a deal on a condo they can use and get rental income from is appealing,” said Sandy McCloud, a Realtor with Century 21 Fox Properties who does much of her business on the islands, particularly Tybee.
BREAKOUT
Local Home Sales Snapshot
The Savannah-area housing market (Chatham, Bryan and Effingham counties) continued a summer-long trend of strong sales in August. A look at the local market (numbers include residential real estate, including single-family homes, modulars, townhomes and condominiums):
Month |Inventory |New |Sales |Pending |Price
August 2012 |3,477 |638 |468 |223 |$191,063
July 2012 |3,460 |610 |444 |278 |$221,061
June 2012 |3,630 |649 |471 |283 |$198,998
May 2012 |3,584 |639 |397 |331 |$169,125
April 2012 |3,694 |648 |363 |275 |$198,823
March 2012 |3,748 |690 |385 |298 |$172,215
February 2012 |3,738 |571 |259 |229 |$157,906
January 2012 |3,754 |687 |246 |238 |$192,020
December 2011 |3,829 |424 |376 |184 |$184,712
November 2011 |3,925 |535 |273 |217 |$160,655
October 2011 |4,057 |543 |307 |215 |$174,147
September 2011 |4,199 |593 |351 |228 |$176,409
August 2011 |4,315 |663 |416 |236 |$183,579
Source: Savannah Multi-List Corp.