SSI Update from Roland Daniel: March 2017
Posted By: Allison VanderVeer
In: St Simons Island Real Estate
Date: Mon, Mar 13th 2017 12:13 pm
LONG OVERDUE SSI UPDATE FOR 2017. It's been a while since I posted the 'STATE OF REAL ESTATE' here on Saint Simons Island AND Coastal Georgia. So, here goes, from Roland's point of view.
2016 was a very strong year of recovery for real estate here in the Golden Isles. Indeed, our recovery began 2013 after the nightmarish 6 years of local downturn that began in early 2007. Actually, we couldn't see it, but things died in the fourth quarter of '06.
Then business began to return and we noticed LESS FORCLOSURES and LESS NEW LISTINGS and MORE INVENTORY TURNOVER. The upturn in business began in earnest, and without hiccups, in 2014. Slowly at first but now quick-paced, the market is heating up. What WAS A BUYERS' MARKET is BECOMING A SELLERS' MARKET.
The last to recover, the luxury market here, is moving again. SEA ISLAND AND HIGHER PRICED NEIGHBORHOODS ON SAINT SIMONS ISLAND are active with prices showing signs of stabilizing somewhat. We in the business are scrambling for new listings and IT WON'T BE LONG BEFORE SELLERS BEGIN DIGGING IN THEIR HEELS on pricing and negotiation.
THERE ARE STILL GOOD BUYS, but fewer and a little farther apart. In my office we've been discussing the fact that good listings are selling quickly, new inventory in both single and multifamily markets are farther away from the beaches and shopping than before. And it doesn't matter! We sometimes feel we're in the wake of a jet that just passed by as buyer clients defer decisions then have to pay higher prices for a similar product just months later. ANOTHER GOOD REASON TO CALL US: OUR EXPERIENCE in these situations, where WE CAN SEE A TREND and share it with our buyers and sellers, is valuable to you in both the short and long terms.
WHY IS THERE SUCH STRENGTH HERE NOW? Some reasons come clear.
1. LINGERING, PENT UP DEMAND FROM THE RECESSION. Baby Boomers STILL retired and STILL wanted to buy, but sat on the sideline until the uncertainty was over. AND, some retirees, stung by watered down investments and retirements accounts, decided to take less risk and buy 'smaller' or 'less expensive' as a hedge against another disaster.
2. SHORTAGE OF QUALITY HOUSEING INVENTORY. During the 6 or 7 years of recession there was literally no sales activity that wasn't tied to forclosures and short sales. Banks quit loaning money for spec homes. Existing home owners didn't remodel and deferred maintenance in the event they were going to have to give a house back. There was no new construction until strong cash investors decided that banks were ripe for the picking for REO properties foreclosed and held in temporary inventory. Our biggest tracts of developable property in SSI were bought at deep discounts and construction didn't begin in earnest until 2014. We're still playing catchup, though a handful of major construction efforts are providing some relief. A lot of this new inventory is considered 'affordable' as the desire to have a piece of this area is stronger across all price ranges.
3. MORE THAN OUR TRADITIONAL BUYER PROFILE. Historically, before the market peak in mid 2006, buyers here were largely from Georgia and contiguous states. However, as our coast has become higher profile, and as buyers previously committed to other, more commercialized markets decided that SSI and Brunswick and Jekyll Island and Sea Island are viable alternatives, we see more and more retirees and second home buyers from the northeast and midwest than before. Georgia is a strong economic engine, and COASTAL GEORGIA IS A TARGET. There are only 3 developed beach islands on Georgia's entire coast: Tybee Island (Savannah), Saint Simons Island / Sea Island, and Jekyll Island. In addition, our newcomers aren't necessarily retirees or empty nesters. In my practice, we're selling second generation clients in their 30's and 40's. This is new to us here.
4. THE SOUTH IS IN VOGUE; CHECK THESE NUMBERS. We are a bit 'in the catbird seat'. There is a national real estate trend towards the South. Recent National Association of Realtors research (see NAR Field Guide to Vacation, Resort, and Second Homes, updated March 2016) revealed that consdering all 4 regions of the country -- Northeast, Midwest, West and South -- 38% of primary residences sold nation wide were in the South, and 48% OF VACATION HOMES SOLD were in the South, and 37% of all investment real estate sold nationally was in the South. I feel this trend is likely to continue. It's more than moderate weather. It's more than this being home for regional people. And, it's more than a more peaceful, slower pace of life. Indeed, it's all of that.
5. AS MARKET IMPROVES, SO WILL EXISTING HOME INVENTORY. Locally, the 'can't afford to keep it' owners fueled the forclosed home and short sale market sales that dominated our during bad times. But now, owners who also were upside down but 'COULD AFFORD TO KEEP IT' are getting closer to par -- value vs debt. That means we'll see some of these houses begin to impact inventory levels here on the coast.
6. OTHER FACTORS LOCALLY. St. Simons Island is the size of Manhatten Island, geographically, and we have less than 20,000 year round residents. Eventually, when all growth here is done -- according to master plan numbers I've seen over the years -- we'll be about 30,000 residents. Essentially all our future NEW GROWTH will be from mid island to the north end, and typically on larger lots than in the south end where all the beaches are found. All south SSI development will be INFILL (building out odd lots or parcels in a primarily fully built area) or redevelopment of existing, typically older, substandard properties. Thus, we are, for all practical purposes 'done' in the coveted south end. We Realtors will be reselling the same properties over and over down here. There are infrastructure issues finally being addressed, primarily water and sewer capacity and renovation of existing sewer facilities. We've even experienced some temporary moratoriums in certain areas that affect new construction and new developments more than existing. All, of course, are affected. In addition, we're struggling with creating a viable tree ordiance for the County. It's probably not too far down the road from implementation, and it may impact subdivision of existing parcels into more than one building site. That may not be a bad thing. Updated flood zone maps are being reviewed for adoption (likely July of this year) and many of our SSI areas become less of a flood prone issue than in the past; you can find the study maps on the Glynn County website. Roads and traffic flow are issues that must be addressed, but compared to most places I visit on both coasts and south of us, we are still a sleepy village.
7. IN CONCLUSION. PERHAPS OUR BEST ATTRIBUTE AND CALLING CARD IS THAT SAINT SIMONS ISLAND IS A TOWN WITH A BEACH RATHER THAN A BEACH WITH A TOWN. There is a genuine sense of community here as well as lots to do for the tourism segment. We're a part of Georgia's earliest history, and there are numerous markers and destinations to delight you. We find a bit of a laid back, coastal lifestyle attractive and attainable. Folks who move here make friends quickly and find a plethora of organizations and art opportunities and shopping and churches in which to become involved. Fishing is good and golf is better! And, the restaurants are excellent (I'll give you a line up of my favorites if you ask for them); you'll find lots of good food and drink here. Did I metion world class hotels?
Both Brunswiick and Saint Simons Island feature regular festivals, art fairs, arts and crafts shows, quality school sporting events, monthly 'first Friday' celebrations in Brunswick, shopping in both the villages and in the Golden Isles Spur 25 gateway from I95 to US 17. An added bonus for you is we're a little over an hour north to Savannah, and a little over an hour south to Jacksonville, Fl. These put cultural events professional sports, more theatre and more shopping and two great, easy to navigate International airports at your disposal.
If you want more information from informed sources, then contact me or any of our Roland Daniel Properties real estate experts. You'll get personalized attention, and solid market knowledge if you do. From forclosures to new construction to resales at the beaches or on our world class golf courses, you'll not be disappointed. THANKS!
Count on some inventory 'SPECIAL PROPERTIES' to appear here soon.
RD