June 2023 Market Update
Savannah Real Estate/Economy News
- The median home sale price in the Savannah metro area reached an all time high in May of $315,000 according to data from the Savannah MLS.
- This is largely attributed to a rapid growth in jobs and income in the savannah area with strong connection port expansion
- Buyers continue to move in from larger markets and bigger cities to take advantage of more affordable homes in our area. We consistently see strong activity amongst transplants coming to take advantage of new jobs in the area, remote workers, and retirees.
- The number of new listings in May of this year was the lowest of any May over the past five years as home sellers continue to sit on the sidelines during 2023. We believe this is largely due to the fact that the majority of current homeowners enjoy low interest rates and are postponing moves and home upgrades because they don’t want to give up their low monthly payments. This lack of supply is a major contributor to the price appreciation that we are still experiencing in this market.
- We expect interest rates to remain elevated for the rest of this year and likely into part of 2024 as well. It is likely that low inventory and slow but steady price appreciation will continue as long as interest rates remain in their current range. Once rates begin to drop we expect inventory to return to the market and transaction volume to increase as many buyers who are currently priced out of home ownership take advantage of decreased rates to re-enter the market.
- The take-away for home buyers and sellers is this: Despite what many doomsday voices in the media say, pricing in the market remains strong and outperforms much of the rest of the country. Unemployment in the Savannah area is lower than the national average and corporations continue to move manufacturing, logistics, and film industry jobs to our area.
- The Savannah ports continue their strong growth
- Plastic resin exports have doubled in the past year(via Georgia Ports)
- As Savannah continues to take on larger quantities of import containers, exporters will take advantage of these empty containers to move their products efficiently
- The new Hyundai motors plant in Bryan County, which is expected to operate with over 8,000 employees, is expected to hire 200 people in January and continue to expand throughout 2024
Nationwide Economy Overview
- The economy has shown lasting resilience following the pandemic despite frequent forecasts by economists of a looming recession
- Economic activity have slowed minimally compared to the Fed’s projections
- The US economy in may was it its most active point in 13 months
- This could prompt the Fed to raise interest rates further to push inflation down
- Economists project above a 50% chance of a recession within the next 12 months
- Current average rates as of June 7th:
- 30 year fixed conventional: 6.89%
- 30 year fixed VA: 6.55%
- 10 year U.S. Treasury: 3.767%
- 1 year U.S. Treasury: 5.237%
- Effective Fed Funds Rate: 4.83%
- SOFR: 5.0500%
- Prime: 8.250%