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Single-family home construction in the U.S. saw gains in December, capping off a year in which housing starts rose to their highest level in seven years, according to the Commerce Department on Wednesday.
Groundbreakings on new housing rose 4.4 percent last month as work began on 728,000 houses across the country, according to the department.
The numbers reflect positive news for the real estate market and could portend good things locally with new residential construction continuing its slow recovery throughout the tri-county area.
According to year-end figures from Savannah’s Development Services department, 344 new residential building permits were issued within the city in 2014, an increase of 53 permits over 2013, or roughly 18 percent.
The largest surge in new residential permits occurred between August and September last year, when 149 permits were issued, outpacing the previous year by more than double.
Locally, home builders have shifted their focus to starter homes in previously stalled subdivisions and small clusters of luxury townhomes, especially throughout the Historic District.
Mid- to higher-price point multifamily units around West Chatham, particularly in Pooler, also continue to break ground at a steady pace.
On Chatham Parkway, across
from the Savannah Morning News headquarters, construction crews have cleared several acres of forest to make way for the Legends at Chatham, a new 255-unit luxury apartment complex with one- to three-bedroom apartments for rent.
“We’ll have 11 different floor plans … and looking at hopefully opening the clubhouse between April and May,” said Amanda Hardy, property manager for Legends. “June is the projected date of our first building being delivered.”
Like most new construction, the developers will try to pre-lease as many units as possible before delivering their first building to help gauge demand and market conditions.
Another 20-acre subdivision off Jasmine Avenue in southeastern Chatham, to be called Heron Walk, recently gained a recommendation from the Metropolitan Planning Commission board for its master plan of 89 single-family lots.
Under Contract
Another positive indicator for new home construction is the number of new homes that were put under contract. The Savannah Multi-List Corp., a local real estate tracker, keeps up with these figures for Bryan, Effingham and Chatham counties, which can help determine the pipeline for new housing in different ZIP codes.
About 1,063 new construction homes were put under contract in the three counties in 2014, a 25 percent increase over 2013. The largest gains were seen in Effingham, where more than double the number of new homes, at 337, were put under contract in 2014.
“It’s been a case of builders adjusting what they’re building, the availability of the subdivisions that were already ready to move forward and the improving market,” said Patrick Kelly, technology director at the Multi-List Corp.
Effingham, which had a number of significant subdivisions stall during the market crash in 2008, has been able to resume some of that development and adapt to the newer climate.
“One of the things the builders did do is start doing a lot bigger houses at a lot lower price per square foot, in particular in Effingham,” said Kelley.
In a 2014 report from the National Association of Realtors, the organization said the share of new homes purchased “remains at suppressed levels as construction has remained at low levels across the U.S.”
The study said 28 percent of homes purchased in 2003 were new homes compared to 16 percent in 2014. That number, however, is a little better in the South, where 21 percent of buyers bought a new home.
New Homes Under Contract
2014 ... 2013 ... % change
Chatham 521 540 -3.5%
Bryan 205 164 +25%
Effingham 337 145 +132%
Total 1063 849 +25%
Source: Savannah Multi-List Corp.