Spring has come early in Savannah, as reflected in the housing market if not in the weather.
The Savannah area, which includes Chatham, Bryan and Effingham counties, posted 290 sales in February, according to Savannah Multi-List Corp. statistics. The returns marked an 11 percent jump over February 2012.
Last month also saw more homes go under contract than a year earlier and pushed the total number of pending sales over the 600 mark. The activity set up what many Realtors say will be an early start to the busy spring buying season, which traditionally ramps up in April.
“It’s kind of crazy to be this busy this early,” said Donna Davis, president of the Savannah Area Board of Realtors and an agent with Adams Realty. “We’re to the point where, for the first time in years, we need more inventory.”
Inventory, or more specifically months’ supply of homes for sale, is a statistic Realtors watch closely. Months’ supply of inventory reflects how long it would take to exhaust the inventory at the current sales pace, based on the average sales pace of the previous 12 months.
The Savannah area’s months’ supply of inventory fell to 9.6 months in February, down from 11.1 months in February 2012.
The situation is mirrored around the country, according to Lawrence Yun, an economist with the National Association of Realtors.
“Favorable affordability conditions and job growth have unleashed a pent-up demand,” Yun said. “Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country.”
Savannah activity comes with a caveat. One of the driving forces behind West Chatham sales in recent years, USDA rural development loans that require no money down, will no longer be available in Chatham County effective March 27.
Given that all sales must be closed by that deadline, February likely “borrowed” activity from March for buyers “to get in under the wire” for USDA, said Realtor Vicki Linscott with Keller Williams Coastal Area Partners.
“For a lot of the people who had been shopping around and taking their sweet time all the sudden there’s a sense of urgency,” Linscott said. “It’s sad that the USDA program is going away in Chatham because it was a good option for buyers, but it’s probably about time. The program is supposed to be for rural areas, and Pooler isn’t very rural."
Properties in Bryan and Effingham counties will still be eligible under the USDA program.
Even without the USDA option, Realtors anticipate a surge in Chatham County this spring. Interest rates on 30-year mortgages remain under 4 percent for most buyers, and the average sales price continues to sag at $185,989, with the median price $30,000 less.
“The gut feeling out there right now is interest rates are going up eventually – not any time soon, but eventually -- and you combined that with all the stories nationally about price appreciation, and the experience buyers and sellers are thinking, ‘Hey, if I wait much longer, I’m going to be able to afford less,’” Linscott said.