Compared to many U.S. cities, Savannah’s residential real estate market held its value for the first quarter of 2023, with strong sales and rising prices despite increasing interest rates and limited inventory.
After a relatively quiet final quarter in 2022, the residential real estate market in Savannah cranked up in the first quarter of 2023 as homebuyers from larger, more expensive cities across the country continued to relocate to Savannah. We are still seeing multiple bids and escalation clauses, but not at the same level as during the pandemic, when bidding wars led to local homes selling for as much as $100,000 over the listing price.
A growing number of buyers are choosing to move to Savannah because it has a vibrant urban center, great quality of life, diverse housing options, stunning beaches, incredible natural beauty, a strong cultural scene and a convenient airport with direct flights to major cities across the United States. In today’s environment, newcomers are looking for neighborhood amenities, walkability, home offices and outdoor spaces, but are encountering limited inventory. This combination of high demand and low inventory is contributing to rising home prices in Savannah and the continuation of a seller’s market.
As a result, we are continuing to see increases in home values in Savannah in 2023, despite the fact that mortgage rates have doubled from one year ago, but not at the rates seen during 2021 and 2022. Here are a few key takeaways about Chatham County’s current residential real estate market:
- Savannah’s residential real estate market is holding its value better than many other markets and remains significantly lower than the national average. The median home value in Chatham County is currently $295,558, which is significantly less than the national median home value of $461,000, as reported by the National Association of REALTORS. That means buyers can still get more for their money in Savannah and the surrounding area, which is particularly appealing for retirees and newcomers who are moving to Chatham County from more expensive metropolitan areas.
- Inventory remains extremely tight. According to data from the Savannah Multi-list Service (MLS), Chatham County had approximately 1.72 months of residential inventory in March 2023, which means that we are continuing to see a seller’s market defined by high demand and low inventory. It’s important to note that this local figure is significantly lower than the 2.6-month supply of national inventory recently reported by the National Association of REALTORS. In March 2023, Chatham County MLS data showed 782 listings, marking a significant decrease from 1,192 listings in March 2021 and 1,927 listings in March 2020. Savannah’s real estate market still has a lot of pent-up demand and not enough inventory. It will take some time for inventory levels to be restored in 2023 and beyond.
- Buyers from larger markets are driving prices higher. Buyers from New York, Chicago, Boston and California have a different perception of value and are selling their homes in pricier states for more than $1,000/square foot in some markets and purchasing more affordable luxury homes in Savannah for $400/square foot, for example. Some buyers are working remotely from major metropolitan areas, earning big-city salaries while living in more affordable homes in Chatham County. According to the Savannah MLS, the median sale price for a home in Chatham County in 2023 year-to-date is $330,000, compared to $315,000 in 2022 and $266,000 in 2021. The median residential sale price in Chatham County is slightly lower than the statewide average median sale price of $340,000, as reported by the Georgia Association of REALTORS.
- Downtown Savannah and The Landings are both hot markets for buyers and sellers. All Savannah-area properties appreciated at an accelerated rate during the pandemic, but the two local neighborhoods that have experienced the highest level of appreciation include downtown Savannah and The Landings at Skidaway Island. Both areas have experienced significant increases in median sale prices over the past several years. In the 31401 zip code, the median sale price for residential property increased from $485,221 in 2020 to $766,524 in 2023, marking a 78 percent increase since the beginning of the pandemic. In the Skidaway Island 31411 zip code, which includes The Landings, the median sale price skyrocketed from $553,394 in 2020 to $861,452 in 2022, marking a 70 percent increase since the beginning of the pandemic. The trend demonstrates the growing appeal of this popular gated community, which offers exceptional amenities, including golf, tennis, boating and nature trails.
No one can predict where Savannah’s real estate market is headed, but it will be interesting to see where the local real estate market goes in the future. I expect that coastal Georgia will continue to be discovered by buyers from larger cities and that our market will continue to offer exceptional options for homeowners at every price point.