I cite Zillow’s latest estimates for the Savannah metro area in that column.

I’ll embed that data here:

As you can see, the local estimates are pretty noisy, with some improbably large changes over short periods of time. That’s probably related to the relatively small amount of data compared to larger areas (for a long time, Zillow did not even give estimates like this for Savannah, and Case-Shiller will likely never give detailed estimates for a metro of our size).

I think the main issue going forward for prices is inventory. In July, the Savannah metro area had over 7 months of inventory; historically, a normal level of inventory is 5 months or so.

We’ll likely never see “the end of the suburbs” in any true sense, but we could be headed into a new phase of the “American Dream” as suggested in Leigh Gallagher’s The End of the Suburbs. A snippet from the excerpt on Today’s website:

The reasons are varied, but several disparate factors all point to a decrease in demand for traditional suburban living: many Americans are tiring of the physical aspect of the suburbs, the design of which has changed dramatically over the years to gradually spread people farther and farther apart from one another and the things they like to do, making them increasingly reliant on their cars and, increasingly, on Thelma and Louise –length commutes. Big demographic shifts are seeing our population grow older, younger, and more diverse seemingly all at once, while powerful social trends are shrinking and transforming the American nuclear family, long the dominant driver of suburbia. An epic financial crisis coupled with the rising cost of energy has made punishing commutes also unaffordable, while a new- found hyperawareness of environmental issues has shaken up and re-ordered our priorities in ways that stand in direct conflict to the suburban way of life.

And this, based upon Gallagher’s knowledge of business decisions by major homebuilders:

This brings me to an important point: when I talk about the “end of the suburbs,” I do not mean to suggest that all suburban communities are going to vaporize. Plenty of older suburbs are going strong for reasons weâ€ll explore later, and many newer suburbs are reinventing themselves to adapt to the times. But when the people who have de- livered the same kind of one-size-fits-all suburban subdivisions over the past few decades are tearing up their blueprints, venturing gingerly into urban markets, and actually fainting at the thought of what the future holds, something big is afoot.

As I’ve said here before, it’s difficult to know what precisely all this means for a city the size of Savannah, with its relatively (compared to larger cities!) compact and easy-to-navigate suburbs. These trends are bad news for some planned major developments on the fringes of the city, for sure, but nearer suburbs could absolutely adapt, reinvest, and reimagine themselves. The problem is that many residents — sometimes older ones who moved to the suburbs for reasons that look increasingly outdated — are resistant to adaptations that could be crucial for maintaining values and attractiveness.

Here’s Today’s brief segment (you might have to wade through a commercial first):

Visit NBCNews.com for breaking news, world news, and news about the economy

So what happens over the next decade or two, as aging suburbanites need to sell their homes? Will younger middle-class and upper middle-class Americans buy those homes in the numbers that will be necessary?

James Briggs sure doesn’t think so. From his Letter from a millenial: We’re not going to buy your house in the Baltimore Business Journal:

But take heed, baby boomers and Generation Xers. If you’re planning to hold onto your home for years to come, don’t count on my generation — the millennials — to buy it from you.

The top reason for our lack of interest comes down to money. As the Los Angeles Times reported this month, people in my generation have mountains of student loan debt, and we’re so thoroughly freaked out by the Great Recession that we’d rather live in our parents’ basements than sign our names to more big loans.[…]

But even if we were rushing to banks and begging for hundreds of thousands of dollars in extra debt, most of us still wouldn’t want a house in the suburbs. As the New York Times reported last week, “the next generation of potential homebuyers prefer to live in developments with an array of housing types close to shops and mass transit.” […]

The New York Times cited an Urban Land Institute study that found 75 percent of people in my generation value walkability — a huge shift in attitude from previous generations that built and occupied America’s expansive suburbs. If you’re living in a house that is so far from public transportation, jobs, stores and restaurants that it requires a car for every trip, you might want to consider getting out now.

We’re also going to be seeing pretty dramatic infrastructure needs in many American suburbs over the next few decades, but suburban residents have been among those most likely to oppose tax increases for infrastructure.

I have many times argued on this blog and in my newspaper columns that many suburban neighborhoods can be retrofitted to adapt to changing lifestyle demands, but many current residents of those areas default to NIMBYish postures.

It’s going to be interesting to watch how all this plays out. We should know a lot more in the next couple of years.

All of this data is through March, by the way, and includes data from January, February, and March. So there’s a considerable lag to the Case-Shiller numbers.

From the press release, which can be downloaded here:

Data through March 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, showed that all three composites posted double-digit annual increases. The 10-City and 20-City Composites increased by 10.3% and 10.9% in the year to March with the national composite rising by 10.2% in the last four quarters. All 20 cities posted positive year-over-year growth.

And this:

“Home prices continued to climb,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Home prices in all 20 cities posted annual gains for the third month in a row. Twelve of the 20 saw prices rise at double-digit annual growth. The National Index and the 10- and 20-City Composites posted their highest annual returns since 2006.

“Phoenix again had the largest annual increase at 22.5% followed by San Francisco with 22.2% and Las Vegas with 20.6%. Miami and Tampa, the eastern end of the Sunbelt, were softer with annual gains of 10.7% and 11.8%. The weakest annual price gains were seen in New York (+2.6%), Cleveland (+4.8%) and Boston (+6.7%); even these numbers are quite substantial.

“Other housing market data reported in recent weeks confirm these strong trends: housing starts and permits, sales of new home and existing homes continue to trend higher. At the same time, the larger than usual share of multi-family housing, a large number of homes still in some stage of foreclosure and buying-to-rent by investors suggest that the housing recovery is not complete.”

I’ve been surprised by the vigorousness of the rebound in prices, but there are a couple of key things that I did not adequately take into account: 1) the demand from potential homebuyers who accumulated cash and waited till prices bottomed and 2) the upward pressure on prices caused by the continuation of low interest rates.

Still, home prices are only back to the level first reached in 2003, as you can see on the Case-Shiller graph below, which combines both year-over-year percentage increases and nominal price levels on the index.

When adjusted for inflation, the rebound in prices has only gotten us back to a level first hit around the turn of the century, as you can see on this graph from Calculated Risk:

A simple look at these graphs suggests that home prices might continue to rise, but there’s little reason to expect dramatic increases above the historical trend line. When the Fed eventually unwinds its stimulative measures and interest rates increase, that will also restrain price increases.

We can begin to see when the national housing market returns to something like normal, even if there will continue to be large variations in different cities.

There are some fluid elements to this controversy, and my next column doesn’t come out till Sunday. I have a Thursday deadline for that piece, which makes writing about the Avenues on 61st tricky for City Talk.

So let me put a few thoughts and links here.

First off, we’re talking about the unusually tall apartment buildings now under construction on 61st Street just east of Abercorn.

From an article by Adam Van Brimmer last summer in the SMN, Apartment complex planned for vacant section of Abercorn Terrace site:

A developer bought the Abercorn Terrace property in 2007 bent on turning the low-income housing units into luxury condominiums.

Now five years later, the site is on the verge of finally being fully redeveloped, albeit with a different blend of residences and new developers.

The Chatham County-Savannah Metropolitan Planning Commission blessed Tuesday a plan to build a 32-unit apartment complex on the north end of the nine-acre site. The Savannah Lofts would be constructed on the cleared part of the property across 61st Street from the larger section of the site already redeveloped into Savannah College of Art and Design student housing.

The Savannah Lofts would feature three-story buildings with a mix of three and four-bedroom rental units.

Problem #1 — and by far the most significant of the issues raised in Jessica’s column today: the developer is apparently renting these units by the bedroom rather than the unit. They’re essentially suite-style apartments with one lease per bedroom. This is not the understanding under which these units were approved. There’s no clear, confirming language of this model currently on the Avenues on 61st website, but an ad from April 22 on Craigslist includes this language: “IF 4 PEOPLE FILL A TOWN HOME TODAY, YOU GET YOUR FIRST MONTH’S RENT FREE!”

If the apartments were being rented by the unit, why would the developer care whether the units had four occupants or not?

Assuming the units are being rented with individual leases for each bedroom, then I expect city officials to pursue a stop work order until the issue is resolved.

UPDATE, 4/24, about 5:30 p.m.: As of right now, the a classified ad at SCAD District lists the following, which leaves no doubt that the bedrooms are being rented individually:

4BR townhouses—Luxury student housing located in Habersham Village. Fully furnished, rent incls. cable, internet, W/D and trash removal. Stainless-Steel appliances, walk-in closets, hdwd style floors and ceiling fans. $610/mo. individually leased. 12 month leases. $50 off first monthâ€s rent when you refer a friend, minutes from downtown and seconds from shopping and food. Call today for more information spaces are going fast (912)335-3661.

In her Connect column, Jessica’s main complaint is about the height of the units. I agree they’re too tall.

But take a look at the application before the Metropolitan Planning Commission last year. The developer needed only a 5-foot variance for a setback; no height variances were needed. The site was built up at least a few feet above grade for drainage purposes, but that in itself required no variance.

Is 40 feet (or a few feet more) too tall on that stretch of road? I think so. But the lot has been zoned for that height for decades. When the lot was first planned as condos a few years back, the plan was for some three-story units.

From Jessica and then from others later today, there have been various other complaints about density and especially parking.

Here’s the map of the buildings, with 61st St. at the bottom:

There’s no entry to the complex from 60th Lane. Each of the 32 units — a total of 128 bedrooms (or perhaps slightly fewer if some are 3-bedroom as reported last year) — has a two-car garage. Also, in the original application, the developer asked for parking to be reinstated on-street on the north side of 61st Street, which would add about a dozen spaces to the stock in the area.

Yes, 61st Street traffic would have to be more careful if we reinstate parking on that side, but it’s no big deal. There are residential blocks all over the city where two cars can’t really pass unless one pulls to the side and allows the other to pass. Here’s a screen capture from Google Street view of that block:

So with the 64 spaces under the units and those 12 on the street, that’s 76 spaces. Would that be enough for the 128 bedrooms?

The approved One West Victory apartments are providing 216 spaces for the 330 likely residents. That’s a slightly higher ratio of spaces/residents than the Avenues on 61st, but not much (roughly .65 to .60).

Will that be enough spaces? I think so.

So I’m very concerned about the business model of Chance Partners and Asset Campus Housing — it looks like they’re renting the units in a fundamentally different way than they described when they won approval for the project.

The height is regrettable, but entirely legal. The lesson here is that it pays to know your neighborhood zoning, use, height, etc. rules. I’m also surprised that some neighborhood organization wasn’t more vigilant in raising concerns last year before the development made it through Savannah City Council.

Some of the other concerns I’ve heard today seem off-key to me. Many neighborhoods would like to see more owner-occupied, single-family homes and fewer rental units, but Savannah’s older neighborhoods are pretty much all mixed use. The new apartments on 61st are on a lot that may never have had owner-occupied housing, is adjacent to student housing to the south, is adjacent to a range of businesses in Habersham Village, is on a major bus line, has access to SCAD shuttles, and is only about a mile from SCAD buildings to the west and just a little over a mile from Savannah Tech to the south and a few other SCAD buildings to the north.

That sounds like a great spot for some nice rental units. Just shorter ones.

Check out my Tuesday City Talk column about last Thursday’s grand opening, for which a number of units on the 12th floor were open.

I last wrote about Drayton Tower here on the blog over two months ago in a post about the benefits of greater residential density downtown.

Here you’ll just see a few photos that I took on the 12th floor and one I took from the ground.

People love to hate Drayton Tower, but it’s an architectural gem — of sorts — and it’s a bold and fascinating example of post-WW II architecture right smack in the middle of Savannah’s Historic District.

Pretty swank, in my opinion.

Click for larger versions. I was obviously there near dusk.

The nationwide data, complied by Zillow at the end of last year, identified the worst 1 percent of ZIP codes in terms of the percentage of mortgage holders who owe more than their homes are worth. Georgia has nearly a quarter of those ZIP codes, most of them arrayed in a crescent around Atlantaâ€s southern flank. Michigan, the next hardest-hit state, has only half as many ZIP codes in the worst 1 percent.

The biggest losers, of course, are individual homeowners. But the consequences continue to ripple outward — even as home values are rebounding in other parts of the region. […]

Statewide, 42.1 percent of Georgia homeowners with mortgages are underwater. Nationally, itâ€s 27.5 percent.

Svenja Gudell, a senior economist at Zillow, said she expects Georgiaâ€s numbers to remain worse than the national average for some time. She noted that markets like Phoenix, which also was hammered in the recession, are seeing home prices recover more quickly than Atlanta.

The title of the piece should obviously be more precise. Many homes have no mortgage debt, so the 42.1 percent is only for those that do have mortgages.

Still, that’s frighteningly high.

Given transportation costs, infrastructure costs, and Atlanta’s legendary traffic, I’m guessing that prices might never truly recover in some of the metro areas far flung suburbs.

In other words, did they have so many incentives to make bad loans that they made them anyway? Or were those who made, secured, packaged, and bought and sold the bad loans as clueless as the rest of society?

Those two views are touched upon in Hamilton’s Understanding the housing bubble:

One interpretation emphasizes misaligned incentives. Money managers earned bonuses while others were left holding the bag. Institutions like Fannie, Freddie, and AIG profited handsomely during the run-up, but the government picked up the tab when things went bad. These kinds of explanations come very naturally to most economists, whose models are usually built on the assumption that economic decision-makers are responding in a rational way to the incentives they face.

But an alternative view is that the key players were simply mistaken as a group, lulled into a misunderstanding of what was going on through social and institutional feedback that sustained a misguided groupthink. This view is hard for many economists to embrace, though there is a good case to be made that this is an important part of the story of what we just went through.

Hamilton cites a new paper that looks at the investments and purchases of “securitization investors and issuers” to determine whether they made moves with a clear knowledge of actual conditions. From that paper:

In particular, it is difficult to rationalize why securitization agents endowed with income risk tied to housing would purchase additional second homes and swap into larger homes in 2005 if they simultaneously anticipated an imminent broad-based collapse in housing markets. We also find little evidence that securitization agents were conservative in the value-to-income ratios of their purchases, and that homes purchased in 2004-2006 were among those most aggressively sold in 2007-2009, relative to both control groups. This suggests that securitization agents overestimated the persistence of their incomes and that any consumption stream in these houses was short-lived.

In other words, they find that the agents were as oblivious of the housing bubble as the buyers they loaned to.

There are obviously other questions worth asking about this, some of which are raised in the comments. It’s a provocative post.