Savannah’s rental industry is performing well post-recession, a result of a surge in local demand combined with a nationwide slump in home ownership.
Brandy Mai, a local sales executive with Apartment Guide, an Internet listing site, said occupancy rates have been good this year, especially in places like west Chatham County.
“The average properties I’m seeing, and that doesn’t include luxury or equal opportunity housing, the occupancy seems to be fairly high,” said Mai. “And there’s a boom in apartments in places like Pooler, Port Wentworth and Rincon that are on the newer side.”
Another sign of the rental market’s strength is an across-the-board increase in median rental prices.
According to Zillow Real Estate Research, the median rental price in the city of Savannah rose from $975 to $1,100 over the year, a 12 percent increase.
A breakout of different areas in the metro area yielded similar gains, for example a 15 percent uptick in southside rents and a 7 percent increase on Whitemarsh Island.
Stacie Jaynes, a local property manager, said Zillow’s rental estimates can skew high, but the diversity of inventory in Savannah means most people can find something in their price range.
Of course, location will have the biggest effect on rental rates. For example, average rent for a two-bedroom, two-bathroom apartment ranges from $735-$990 on southside, but $993-$1,149 in Pooler, according to Apartment Guide data.
Overall, average rent per square foot has increased in the metro Savannah market, from 85 cents last year to 88 cents this year, according to research firm Real Data.
Jaynes said the rental market is fairly seasonal here.
“Real estate is seasonal no matter what. It’s just based on when people move,” said Jaynes. “So sales and rentals all surge during the spring and summer.”
Like Mai, Jaynes said she’s noticed improvement.
“My results over the last year have become stronger and my rates have gone up — but only by about $50,” she said. “More people are renting, and it’s easier to find quality tenants.”
Reasons for the rental market’s strength vary but seem to mirror national trends. Nationwide, homeownership hit a 19-year low in the second quarter of this year, according to the Commerce Department, a result of stagnant wages and tepid lending by banks.
“We’re coming out of a recession, so people’s credit might not be that great, and we have such a transient population with the military,” said Mai. “Then a lot of people want to get an apartment first so they can figure out where they want to be in town.”
Jaynes, whose company, Sago Property Management, handles rentals all over town but especially on the islands, said the biggest difference she sees is the number of people converting their homes to rentals because home values haven’t completely rebounded.
“We’re seeing more untraditional rentals and people becoming investment owners,” said Jaynes. “Their intention was to move out and sell their home, but now they can’t sell it for what they need to, so they have to rent it out instead.”
MEDIAN RENTAL RATES
Below are median rental rates for select areas around the Savannah metro area, including Bryan, Effingham and Chatham counties.
Downtown Savannah (31401)
July ’13: $1,200
July ’14: $1,200
Southside (31419)
July ’13: $1,084
July ’14: $1,250
Wilmington Island
July ’13: $985
July ’14: $1,600
Whitmarsh Island
July ’13: $1095
July ’14: $1,175
Rincon
July ’13: $1,095
July ’14: $1,175
Richmond Hill
July ’13: $1,400
July ’14: $1,450
Source: Zillow Real Estate Research