Home sales in 2014 started the year much as they did in 2013, with 307 homes sold in January in the Savannah metro area.
That number is one less than the 308 that sold in January 2013 and 112 fewer than last month, though brokers say it is way too early to tell whether this signals a cooling effect on the steadily recovering local housing market.
The winter months from November through February typically bring a slowdown in buying activity, which is also reflected in higher inventory.
There were about 2,860 active listings in January, equating to about 9.3 months of inventory. This is significantly higher than December, with 6.5 months of inventory, and even last year at about eight months.
Supply hovered in the six- to seven-month range for most of 2013.
January’s median sale price was $160,000, an 11 percent increase over the year, reflecting rebounding home values. Homes sold in 2013 went for an average of $10,000 more than 2012, according to year-end figures from the Savannah Area Realtors.
But as home prices have recovered from their recession lows, mortgage rates have crept up slightly. The Federal Reserve’s new chair, Janet Yellen, signaled this week her intention to continue tapering the Fed’s monthly bond-buying stimulus, which aided the economic recovery and kept interest rates artificially low.
Government-backed mortgage agency Freddie Mac said the average 30-year fixed-rate mortgage rate increased to 4.28 percent this week from 4.23 a week ago and up from 3.5 percent a year ago. The 15-year mortgage rate was unchanged at 3.33 percent.
Michael Caputo, a loan officer with Starkey Mortgage, said there hasn’t been much material impact on homebuyers from what the Fed has been doing, at least so far. Mortgage rates remain historically low compared to five years ago.
“I dont think rate sensitivity is a huge factor right now,” said Caputo. “They’re primarily focused on the right price, the right conditions and the right area.”
Caputo said the dynamic has shifted to people looking to buy the house they need rather than investors “gobbling anything up.”
Nationally, foreclosure filings — including default notices, auctions and bank repossessions — have been declining since 2011, and locally it appears a similar trend is occurring.
According to property data firm CoreLogic, Savannah foreclosure rates were down to 1.03 percent in November, their most recent figures, about .23 less than the year before. The mortgage delinquency rate also decreased during this period.
In Bryan, Effingham and Chatham counties, there were 192 active foreclosure listings in January, its lowest point since September 2008, according to data from the Savannah Multi-List Corporation. However, these figures do not track distressed properties outside the MLS system or shadow listings, i.e. unlisted bank-owned properties.
Industry experts say the inventory has gotten lower, but there’s still a pretty consistent flow.
“It does appear to be a whole lot less now than it was a year ago,” said Joe Drescher, broker-owner of Crossroads Realty.
He said one reason may be that banks are holding onto their distressed properties now that the housing market is rebounding. In other words, they don’t need to get rid of them as fast as before.
Ben Bluemle, owner of Seaport Real Estate Group, said he’d seen a decrease until the last two months, when it spiked back up. He said this could be for a number of reasons, including that banks may not wish to foreclose on properties during the holidays.
He said a reason for the overall decline, especially in bigger markets like Atlanta, Las Vegas and Phoenix, is that hedge fund groups and other private investors swooped in to buy up all the foreclosures and hold them for investment.
“We never had the really big players like Blackstone come into our market. A lot of our properties are near water, which requires flood insurance,” said Bluemle.
According to January’s U.S. Foreclosure Market Report by RealtyTrac, January marked the 40th consecutive month where U.S. foreclosure activity declined on an annual basis. The report noted that not all markets are completely out of the woods as far as recovery goes.
In Savannah, that means homebuyers can still expect to see foreclosures in the mix.
“From what I’m hearing from the banks and investors, it should stay at this consistent flow,” Bluemle said. “The inventory that’s out there is still filtering through.”
Drescher said even though buyers are still asking about foreclosures, he always preaches caution.
“Just because it’s a short sale or foreclosure, the buyer still needs to do their homework,” said Drescher. “Because it may not be a good deal — it still may be overpriced.”
Local Home Sales Snapshot
The Savannah-area housing market (Chatham, Bryan and Effingham counties) began 2014 mostly flat in terms of home sales, but median home prices improved on an annual basis. A look at the local residential market, including single-family homes, modulars, mobile homes, townhomes and condominiums:
JAN. 2013 …. JAN. 2014
Number of homes sold …………. 308 ……… 307
Number of months of inventory… 7.98 ……. 9.31
Median home sale price ……..$143,750 ….. $160,000
Year-over-year declines in Savannah-area foreclosure listings reflect national trends. A look at the local foreclosure market. This data does not track properties outside of the MLS nor shadow inventory not yet on the market.
JAN. 2013 …. JAN. 2014
Number of active listings ……… 444 ………….. 192
Number of sold listings ………… 97 ………… 59
Source: Savannah Multi-List Corp.