A deeper look at housing inventory in various Savannah neighborhoods

In my column this past Tuesday in the Savannah Morning News, I raised a few questions about the current inventory of houses on the market.

We have about a year’s worth of single-family homes listed for sale in the Savannah area — more than twice what we’d expect in a balanced market. As I’ve noted repeatedly, the problem is not just weak sales, but also a higher pace of listings than we would expect based on historical norms.

But the #s vary pretty widely from neighborhood to neighborhood. According to the areas as they are broken down by the Savannah MLS, here are the months of inventory based on May sales vs. total listings, rounded to the nearest tenth:
Historic Savannah: 18.7 months
Savannah (including many midtown neighborhoods): 13.0 months
Southside: 9.6 months
Islands/Beach: 17.8 months
Skidaway Island: 16.5 months
West Chatham: 9.4 months

It’s obvious from that list that inventory levels are somewhat lower in less expensive suburban areas, but those levels are still about twice as high as they should be. It’s really hard to draw any other conclusion than that house prices are going to be under downward pressure for a long time. Even if sales pick up and construction remains slow, there will always be new listings because of obvious changes to homeowners’ lives: expanding a family, divorce, death, bankruptcy, job loss or transfer, and so on. If the rental market for houses continues to grow as seems likely, that will put a natural floor under prices in some suburban areas. Of course, as I note in the column, there seems the likelihood of an increase in listings when the market bottoms and when all the bank-owned properties come onto the market.

Bryan County, by the way, has 9.4 months of inventory, and Effingham County has 14.1 months.

Also, keep in mind that these numbers are just for single-family homes, not for townhouses and condominiums. The condo market is especially problematic, still. Historic Savannah, for example, had 165 listings in May and only 3 sales (more than 5 years of inventory!). On the other hand, Islands/Beach had 161 listings and 11 sales, which yields a better inventory number than single-family homes in that area.

Multi-family, lot, acreage, and commercial sales also all remain very weak.

There are no easy answers here.