“There’s just not as many homes as there should be...there’s that shortfall and then builders aren’t building as many affordable houses.”
Additionally, with record low mortgage rates during the pandemic, many people have chosen to refinance and stay in their current homes, which, in turn, contributes to the existing lack of inventory.
Steve Candler, CEO of the Savannah Board of Realtors, says their database or multiple listing service (MLS) would usually show 2,300 different properties for sale, but, as of late, that number was around 870.
The drastic change is creating a cutthroat market for buyers, says Candler.
“The general public really should get a realtor to help them in the home buying process because it’s so fast and so complicated in the way things are done right now,” he says.
Michael Johnson, a Savannah area realtor who also serves surrounding municipalities in and out of Chatham County, says on The Landings on Skidaway Island, there's about 28 listings in the inventory when usually there's 300 to 400.
As a result, sellers are seeing their houses go into contract in a few days, and selling in as fast as 30 days.
“Some houses are going under contract in less than 24 hours,” said Johnson. “One of my listings right now went live on Friday and we’re sitting here on Monday, and I’ve had 10 offers on it.”
According to Savannah-area real estate data from the Georgia Association of Realtors, the average number of days a single-family home is on market this year through April is 71, while in 2020 it was 91.
With scant inventory, prices are soaring. According to the latest quarterly report released by the National Association of Realtors, "Nearly every metro area tracked...recorded year-over-year price increases in the first quarter of 2021."
Local data from Georgia Realtors Association shows that Savannah’s median sales price for single family homes increased by 14.8% from the last year. The average sales price increased by 21%.
Johnson says that while not all of his listings sell for 100% or more of the original list price, a majority of them do sell between 100-105%.
Meyer and Erickson's agent, Chelsea Phillips from Six Bricks Realty, says she's rarely had a two-bedroom home sell for so much in the Parkside neighborhood (three bedroom, 2 baths are more functional). And that's due to a number of reasons including the state of the current market.
As part of the selling process, many people are refurbishing their homes to maximize the resale value. For Meyer and Erickson, renovating their historic home has had large payoffs.
Ever since they moved in, the two have been fixing up the house, but for the past six months, under the advice of Philips, they really went in.
Phillips says, depending on the neighborhood, something as simple as painting your door charcoal or black can bring in several thousands more.
"Studies show that properties sell 1-2% more on Thursday and Friday," she adds.
As a testament to their efforts, Meyer said their home unexpectedly appeared in a post on the popular Facebook site "For The Love Of Old Houses" and garnered thousands of likes and comments.
"That was kind of like our five minute of fame experience with our house," said Meyer.
Phillips acknowledges the market is booming for sellers, but that it also varies from neighborhood to neighborhood and even street to street. She says that large-scale data could obscure nuances of the housing situation in different areas, specifically noting Savannah's more historic neighborhoods.
Danos iterates that idea. "You can have a waterfront listing that is $1.4 million on one side of the road and, on the other side of the road, since those houses are not on the water, those might be $250,000."
He also cautions against another thing-- calling the market a bubble.
"The last bubble burst because...the prices had been artificially inflated because the market got flooded with buyers. And now the buyer has to really qualify for a loan," said Danos.
"I think the market is going to stabilize...I think you'll see appreciation will slow down and you won't have as much as you've seen over the past year."
On the flip side, the sudden appreciation is affecting affordability, especially for first-time home buyers, said Lawrence Yun, NAR Chief Economist in the NAR press release.
“With low inventory already impacting the market, added skyrocketing costs have left many families facing the reality of being priced out entirely."
Nancy Guan is the general assignment reporter covering Chatham County municipalities. Reach her at firstname.lastname@example.org or on Twitter @nancyguann.
This article originally appeared on Savannah Morning News: Savannah real estate market: Sellers cashing in big with low inventory, low interest rates