Although residential construction in the Savannah metro area has suffered through a three-quarter recession, the sector may be at the bottom of the cycle. During the first quarter, the number of building permits issued for single family homes increased 3.2 percent from the previous quarter, after the usual seasonal adjustment to the data. On an over-the-year basis, permit issuance appears to have bottomed out in the last quarter of 2007. Other evidence suggests that the inventory of new unsold homes is beginning to back down from cyclical highs. The average value of a new home building permit issued decreased modestly to $157,500, but has been moving within a relatively narrow range for several quarters. (Dr. Michael Toma, AASU Economic Monitor 1st Qtr 2008 )

 
This is similar to what I have felt about the existing home sales market in our region.  I have said recently that I believe our below $250,000 market has picked up considerably and is somewhat strong. Which I believe will translate into a stronger $250,000 to $350,000 market this Summer and culminate in a Fall market with homes under $500,000 selling well again.  I do think the $500,000 to $1,000,000 market will not return until next Spring however.  Our luxury market continues to be on par as luxury Buyers are less affected by slowing economic factors and should do well right into next year and beyond.  Dr. Toma’s report concluded with a brief wrap-up which I will include here as my conclusion:

In conclusion, the two-quarter decline in the leading index continues to send a clear signal that the economic environment in the Coastal Empire will remain challenging through 2008. While some promising (perhaps fledging?) signs of stabilization are emerging from the regional housing market, the area’s labor market will be hard-pressed to absorb surplus labor in the short run. 

(Dr. Michael Toma, AASU Economic Monitor 1st Qtr 2008 )

 

 

 

 

I say a warning because this threat of foreclosure is affecting a large sub-section of our society and I feel that everyone needs to be aware that anyone can be in this situation at one time or another.  Many are able to turn their situations around, as I hope the McMahons will.  I also think that the lending institutions are aware of the mounting threat and have some systems in place to help those that are proactive and contact the bank before being in default.

When I say lesson, I mean a lesson for home sellers and real estate professionals.  Both of these groups need to look at the details of the McMahon story and take them into consideration.  The home has been for sale for two years for $6.2 Million.  It has been reported that the McMahons are in delinquency of  $644,000 and that they have loans of $4.8 Million.  Your real estate professional should be your real estate adviser.  The McMahons have known they were in default for at least a few months to wrack up $644,000 in arrears and that information should have been made crystal clear to their agent early.  In response, their real estate professional could have advised an immediate and decisive price reduction to get the home sold. 

If you are currently facing foreclosure, tell your real estate professional as such and how far along in the process you are.  Let me repeat, tell your real estate agent you are facing FORECLOSURE.  Many real estate professionals have experience in dealing with foreclosures and the lending institutions who are filing these defaults.

Would you rather sell your home for less than what you owe and be a little in debt with a decent credit score or have your financial situation splashed on national television for everyone to see and your credit destroyed if you go all the way to foreclosure?  Okay, so your foreclosure might only make the local newspaper, but your friends and neighbors will find out and your credit will be affected.  Not being able to pay your mortgage is NOT a crime, but allowing the bank to take it without a fight is.  Be proactive and enlist the help of a real estate professional who knows how to deal with preforeclosures, including marketing to investors and savvy home buyers looking for a deal as well as aggressively pricing the property.

Lastly, I want to address the main factor that affected the foreclosure situation and the wrong way to place blame.  The neck injury which kept Ed McMahon from working, thereby creating a disability, should have been covered by some sort of disability insurance.  Everyone should consult their insurance professional when purchasing a home and inquire about not only hazard and life, but as important disability insurance.  It is more likely you will be injured and unable to work than the likelihood of death, as shown at MetLife.  In placing blame, it was not the paparazzi that have kept the McMahon home from selling; it was probably the price and the “black mold” history.  Perhaps the home needs a new tag-line like, “Live like a celebrity, paparazzi included at no additional charge for a limited time!” or more simply “Home in Foreclosure, Celebrity Legend Considering All Offers”.

Ed McMahon Fighting Foreclosure On His Beverly Hills Home

I want to thank the amazing HD video crew of Christopher Buck of Buckshot Productions and Kerry Buck of Fly In Productions for their professionalism and their friendship.  If you ever need a production company please use one or both of these talented brothers.

Also, a big thank you to Pie Town Productions and their Segment Producers Nathan Grover and Field Producer Dominique Skamra for their excellent communication and this incredible opportunity.  Please feel free to comment on my HGTV premier on May 25th, 2008 at 7:00 PM ET!

Let’s take a look at the Landmark Historic District.  The boundaries of this area are from the Savannah River in the North to Gwinnett Street to the South, and from East Broad Street to Martin Luther King Boulevard (West Broad Street) in the west.  Last year there were 130 sales in this area or 10.8 per month.  The good news is that although there are 31 sales so far in 2008, 15 of them were last month.  As I said two weeks ago the great deals have been snapped up and May will be another great month.  We have bounced off bottom in Savannah, the only question left is when will you get into the market?

  506 Tattnall Street — Under Contract

Savannah’s Hispanic population continues to grow as any contractors and yard maintenance companies continue to hire and train an eager work force from not only Mexico, but also the Dominican Republic and other Latin American countries.  The Spanish influence is present in Savannah, but not as prolific as it is in St. Augustine where it is said that Ponce de Leon found the legendary Fountain of Youth.  It is very sulphuric tasting but the gardens around it have the most beautiful flowers and peacocks.

Tomi and I went there for our first anniversary and enjoyed the Casa Monica hotel, owned by the Kessler’s who also own the Mansion on Forsyth and the soon to be opened Bohemian Hotel on Savannah’s River Street.

Well ¡Viva la Mejico! and the Spanish influence in all our lives.

In her Today show interview she mentions the five things you should look for when evaluating a place to purchase for retirement, I will evaluate how Savannah stacks up:

• Check out the local job market
• Look for a charming downtown
• Buy in a town that has a stock of older homes
• Count the “for sale” signs

The Local Job Market

Savannah is booming with economic growth.  Gulfstream Aerospace continues to expand as an insatiable appetite for the newest G650 aircraft keeps producing new jobs.  VeriSign has created the gold standard for internet security.  JCB keeps building and selling heavy construction equipment. Our port is ever expanding and now talks of a new, larger cooperative port on the South Carolina side of the Savannah River makes the horizon golden.  All of this and the Savannah College of Art & Design and Savannah has an outstanding local job market.

Look For A Charming Downtown

Enough said.

Buy In A Town That Has A Stock Of Older Homes

Begun in 1733, the first city of georgia and the original 13th colony has many histroic structures including many 1820′s federal style brick townhomes and then a fine representation of Queen Anne and Italinate styles from the 1850′s as well as a plethora of victorian style homes.  And that is just one of the city’s nine (and counting) registered historic districts.

Count The “For Sale” Signs

Okay, here is where we may be not the ideal retirement home purchase city, but I have personally taken down three signs this week and if more signs like the one below would go up, Savannah should be at the top of any retirement homebuyers list.

This week I am calling all of my contacts in order to get more inventory because there will be a need for diversity in listings in the coming months as properties go under contract.  I have already had twice as many showings on my listings this week from last week and it is only Wednesday!  Hopefully this will translate into offers for my loyal Sellers. If you would like to explore my current listings please visit PeterNelsen.com.

Many real estate closings happen at the end of the month for shear economic reasons.  That is because if you have a loan for the property you are purchasing the bank will charge you up front for interest on the loan for each day until the end of the month.  So if you close on the 1st day of April you will have to pay a full months interest payment at closing, but you will not have another payment until the 1st of June.  However, if you close today, the 30th of April, you will pay one day of interest at closing and your first payment will be still be due on the 1st day of June, but you will have more money in your pocket.  Therefore, your real estate professional should book your closing time early in order to get the time slot you want.

This is important to Savannah because although we have seen a boom in housing, including many condominium conversions and in-fill projects, our population has not increased at the same rate.  Second home buyers usually keep their residency in their first home, and students normally keep their home address, not their school address.  Even most military don’t become residents because they will likely be moved within months, not years.  Home ownership then, as a non-resident, means that the city and county benefit from the property taxes not subject to homestead exemption and more importantly not subject to our Stephens-Day law which holds the property taxes to small increases every year as opposed to re-assessment.  This keeps the coffers of the local government filled and the squares and parks beautiful.

Vacant houses also affect the Real Estate market, in that, homes that are vacant usually sell for less money, and that means good business for professional staging companies.  Many times I will ask my clients to stage the home after a showing goes poorly and many times they agree and that makes a big difference, even if it is just for pictures.

Lastly, I want to mention security for vacant homes.  I recently experienced a security breach at a vacant listing where an alarm was present but not activated for ease of showings.  The side door was compromised and a new stove was taken.  This is not a new occurrence, and in fact I have heard of a couple cases of this in Atlanta, GA from new homes that are vacant.  My suggestions:  1. If the home has an alarm, set it, every time;  and 2. Have someone check the home once a week if it is not being shown very often.

Vacant homes are just part of Savannah and residents keep an eye on things, so go ahead and get a second home here.  Maybe in the future, more of those second homes will become primary residences and Savannah will continue to grow.  Savannah is a gem of a city and partially vacant, but never abandoned.

Sunday we did some gardening in the yard with again perfect weather, not too hot with a gentle breeze.  I spoke with several people and we all agreed that the last two years spring was only a couple of days.  It went from cold to hot in a week, but not this year.  We have had more great days and a lot of them over weekends.  It just serves to remind me why we found Savannah in the first place as a close match to the weather in Taipei, Taiwan where we lived for two years before returning to the states.  Taipei was great, but Savannah is better.  It is the people who make it so, characters and all.

At night they screen films in the park as part of Films in Forsythe at 8:30pm tonight “Jaws” and Saturday “An American Tale”.

It is also a very busy time for your neighborhood Realtor® with all of the parents in town researching whether to buy or continue to throw away money every month on rent.  Check out our company blog for some of the best options for students downtown: SCAD Options or how about this one bedroom one bath in the center of town?

24 East Macon Street Unit 3 — $239,000