Like other national markets, Savannah GA real estate has "shifted" over the past 18 months. The transition from a well-balanced market with residential inventory (new listings) and sales in a parallel track to an unpredictable one was realized almost instantaneously in January 2008. Since that date, inventory has increased at almost twice the rate of properties sold.
For the first 12 months of the market shift, it was difficult to convince property sellers that the world had changed. Realtors were charged with re-educating clients about the new rules of real estate transaction, with emphasis on pricing strategies, property condition, and realistic expectations on timetables to achieve the desired outcome. The elements of pricing below recent sales, ensuring proper staging, and scenario planning for potential shortfalls at closing have now become commonplace.
Even though these tactical approaches to getting properties sold continue to be at the forefront, there has been a recent trend that may hint that the residential market is recovering slightly. In 2009 to date, the gap between the addition of new listings and the number of properties sold monthly appears to be closing slightly, with sales at pre-shift levels. The slow-down of new additions to inventory may enhance market stabilization. Certainly, a variety of factors may be driving the decline, including but not limited to: (a) the seller's desire to ride out the market shift; (b) the availability of mortgage modifications, allowing sellers to remain in homes; and (c) the hesistancy of sellers to make move-up buys due to current economic conditions.
Regardless of the driving forces, the slow-down is providing a much needed market "breather" that will potentially allow sales to reduce overall inventory and add balance to the market. Certain areas within the Savannah market, such as the southside and the bedroom community of Richmond Hill, already show reductions in the months' supply of inventory on hand and may be the first areas to recover.
The increase in sales has also been driven by a multitude of factors, not the least of which is the First Time Buyer's Tax Credit, which has tipped the scale for many buyers who have been fence-sitting over the last year or so. Added to the national initiative, the Georgia income tax credit and the availability of funds for buyers of foreclosed properties have served to entice more buyers into the market. Of course, a large percentage of the sales have been in price ranges under the historical area averages [future blog topic], but sales are sales. Each one is a win-win under current market conditions.
What does the change in the list-to-sale market indicator mean for buyers and sellers? For local sellers, there may be light at the end of the tunnel. Basic economic theory would note that the lower the supply, the higher the demand. In other words, weeding out some of the competing inventory cannot possibly hurt. For buyers, the time is fast approaching (and in some areas, already here) that a sense of urgency needs to come into play when considering real estate purchases.
Overall, for the Savannah area market, the ratio of listings to sales has indeed improved. Nevertheless, it is only one indicator of market recovery. A close watch on this and other data will tell the tale. As a local market expert, I'll be watching.
