Some good news on the local front. Savannah has shown decreasing inventory for 9 straight months, which will help prices rebound. We’re also seeing out-of-state buyers, which has been an important part of our market in Historic Downtown Savannah.
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Realtors cautiously optimistic heading into New Year
Posted: January 12, 2011 - 3:18am | Updated: January 12, 2011 - 5:34pm
By Adam Van Brimmer
Finally, a glimmer of what a local housing recovery looks like.
December saw an unexpected uptick in home-buying activity, Savannah Multi-List Corporation statistics show. The 305 sales in the Savannah area, which includes Chatham, Bryan and Effingham counties, marked a six-month high.
Another 466 homes were under contract as of Tuesday, promising a rarity: A strong January.
The December sales numbers paralleled those of December 2009 when the extension and expansion of the federal homebuyer tax credit drove sales. That credit expired in April 2010.
"There are going to continue to be some problems, but you are starting to see the turn now," said Monica Spillane, president of the Savannah Area Board of Realtors. "I'm encouraged by that."
Even more encouraging than the sales and pending sales of single-family homes, townhouses and condos locally was the continued contraction of supply.
The inventory of homes for sale fell to pre-recession levels and is down 14 percent from mid-2010 levels. Pushing the inventory down was a drop in new listings, which fell for the ninth consecutive month.
Realtor optimism is tempered by concerns over what those in the industry call "shadow inventory." Shadow inventory includes homes owners who would like to sell but haven't listed, because of market conditions as well as those in foreclosure or that have been repossessed but not yet listed.
Market improvement could prompt would-be sellers to put a "for sale" sign in the yard. Foreclosures, meanwhile, have yet to abate in the Savannah area.
"Unfortunately, foreclosures are not over," Spillane said. "But in terms of shadow inventory, I don't think there are many of those out there, here, as in other parts of the country."
Active buyers
Credit the U.S. Army and real estate investors for driving December's sales volume.
More than 20 percent of the homes bought in the month were financed by Veteran's Administration loans. Another 23 percent were bought with cash, traditionally the purview of house-flippers and landlords.
The jump in military sales is not surprising considering the Army's Third Infantry Division, based out of Fort Stewart, returned from a year-long deployment to Afghanistan in late 2010.
Plus, those soldiers remain eligible for the federal homebuyer tax credit, worth $8,000 to first-time buyers and $6,500 to those who have owned another home within the last three years.
Given the military influence, December sales were predictably strong in West Chatham and Southside Savannah - areas in close proximity to Interstate 95 and the base. The Pooler/Berwick/U.S. 17 South neighborhoods saw their second best sales month of 2010.
Close to half - 42 percent - of the VA purchases were on new construction homes, good news for home builders.
As for investor activity, the end of the year typically sees an uptick in purchases because of tax reasons. Interestingly, investor activity in December was not as focused on distressed properties as in previous months.
Optimism on the islands
The coastal regions appeared to be building momentum going into the New Year.
The Islands/Beach area of multi-list statistics - Tybee, Wilmington, Whitemarsh, Talahi, Oatland and Dutch islands as well as Isle of Hope and Isle of Armstrong - saw the most sales since April at the highest average price since June.
Prices climbed despite close to 40 percent of those sales being on foreclosure and repossessed homes.
The activity on distressed properties bodes well for the spring, Realtors said, because it takes those homes out of the inventory and will firm up prices.
"The islands held their own, relatively, for most of (2010)," said Re/Max Savannah's Cheryl Klein. "Where sellers have been taking a beating is on price, and it's encouraging to them and for the market to see that pop up."
Skidaway Island real estate agents share that optimism. The island had 12 sales in December, the most since August.
But it's the renewed interest from out-of-town buyers, particularly retirees from the Northeast and New England, that has Realtors encouraged.
Bill Houghton, president of The Landings Company, credited a number of factors, such as impending bad weather in the Northeast, pent-up demand, the November election results, continued low interest rates and depressed values, for the uptick in activity.
"New England, New York, Washington, D.C., their prices and sales have increased," said Bob Diamond of Skidaway Island Properties. "Once they sell their house up there or even just get it under contract, they start to look down here. As activity increases up north, so will ours."
View original article: http://savannahnow.com/news/2011-01-12/local-home-sales-jump-december
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